CSSF Circular 25/901: SIF, SICAR and Part II UCI rules

On 19 December 2025 the CSSF published Circular CSSF 25/901 (full text, EN PDF). It collapses four legacy texts into one circular, organised by theme, for specialised investment funds (SIFs), investment companies in risk capital (SICARs) and Part II UCIs. It entered into force the same day.

The headline for operators is that concentration limits now scale with the investor type the fund may be marketed to. A fund open to unsophisticated retail investors works to 25% per position. A fund reserved to well-informed or professional investors works to 50%. Borrowing for investment purposes is capped at 70% only where unsophisticated retail investors can get in (Circular 25/901, points 8, 11 and 32).

Alongside the circular, the CSSF published a companion Compilation of key concepts and terms for funds other than UCITS and MMFs. The CSSF describes it as a first version and says it will be updated on a regular basis. It deliberately did not issue the Compilation as a circular, so that it can stay flexible (CSSF press release, Dec 2025). As at 6 October 2026 the circular page links one English Compilation file and announces no revision. The Compilation itself carries no version date (CSSF circular page). Whether it has been revised is open: see To verify.

Existing funds are grandfathered. The covering letter says the circular "does not call into question the rules adopted by the funds or compartments authorised by the CSSF before the date of entry into force". Point 50 gives that its operative form: such funds "may continue to apply" those rules (Circular 25/901, introduction and point 50). Every new fund, and every new compartment of an existing umbrella, lands on the new framework. The practical work therefore starts with your next authorisation file, not your existing book.

Sources for this page: the Circular 25/901 primary text (EN PDF) and the CSSF press release. The primary texts of circulars 02/80, 07/309, IML 91/75 and 24/856. The RAIF Law as coordinated by the CSSF. The CSSF status pages for 06/241, 08/356, IML 91/75 and 26/912.

The repeal wording sits in Circular 25/901, points 51-52. The legacy limits come from the 02/80 and 07/309 primary texts. Circular 02/80 held its 20% single-issuer limit in section D and its 20% single-target-UCI limit in section C. Under 25/901 the SIF limit moves from 30% to 50% because SIF investors are well-informed by law. Its borrowing ceiling of 200% of net assets, or 400% for strategies with highly correlated long and short positions, sat in section B.

Where Chapter I of IML 91/75 came from. Circular 02/80 describes Chapter I as the rules "applicable to UCIs other than UCITS and providing for specific rules for three types of specialised UCIs" (02/80, preamble). The current French text of IML 91/75 shows Chapters G and I only as "Abrogé", with a footnote to Circular 25/901 (IML 91/75, FR text). The original subject of Chapter G is still open: see To verify.

Circular 08/356 still applies outside Part II. The CSSF's page shows 08/356 in force, as amended by Circular 25/901 from 19 December 2025. It still lists UCITS and their management companies among its addressees (CSSF 08/356 page). Read with point 52, the circular removes Part II UCIs from 08/356 and leaves UCITS on it.

One repeal reaches further than this circular. Circular CSSF 24/856 sets the NAV-error and investment-breach regime. Its point 49 defines the investment rules a breach is tested against. That list covers CSSF circulars in general, and then names 07/309 as an example. Circular 24/856 has not been reissued since the repeal, so it still refers to an archived text.

For a SIF authorised since 19 December 2025, the risk-spreading rule its breach is measured against is Chapter 4 of this circular, alongside the other rules 24/856 covers. A grandfathered SIF may still be running the 07/309 spread under point 50. The breach and remediation side is annotated in full on the Circular 24/856 page.

The covering letter names the directors (dirigeants) of these funds and the persons involved in their functioning, management and control. Each must ensure compliance within the scope of their own responsibilities (Circular 25/901, introduction). For an ELTIF, the label substitutes the EU limit set for this circular's, so the two do not stack (point 2(a)).

RAIFs are not in scope because the CSSF does not authorise them, so the circular does not bind them by its terms. Expect its concepts to be read across all the same. The RAIF Law requires an ordinary RAIF to invest "with the aim of spreading the investment risks" (RAIF Law, Article 1(1)(b)). For a risk-capital RAIF, risk capital means contributing assets to entities "in view of their launch, development or listing on a stock exchange" (RAIF Law, Article 48(1)(a)). The risk-spreading interpretation in Chapter 4 and the risk-capital criteria in Chapter 5 are the CSSF's reading of those same concepts. Whether RAIF practice follows them is an open point: see To verify.

Eligibility decides the limit set. A Part II prospectus that technically leaves eligibility open to unsophisticated retail investors puts the fund on the stricter set, even if the register is 100% institutional. The decision for each new fund or compartment is a choice. You can restrict eligibility and take the wider limits, or keep retail access and run the book at 25% and 70% (Circular 25/901, point 8).

The calculation basis. Limits apply in principle to the fund's assets or its commitments to subscribe (point 7). The infrastructure limit is the exception: point 8(d) measures it against assets only. A different basis must be justified to and accepted by the CSSF (point 7). Compliance monitoring therefore needs to know which basis the sales document picked, and the sales document must state the limits and their basis (point 38).

Derogations and extra restrictions. The CSSF may grant further derogations on a "duly motivated justification". For a specific investment policy, it may equally impose additional restrictions (point 12). Investments made through intermediary vehicles are tested at the level of the underlying investments, not the vehicle (point 10).

The legacy figures. New limits come from Circular 25/901, points 8, 11 and 32. Under 07/309, a SIF could put at most 30% of its assets or commitments into securities of one type from one issuer. The same 30% capped short positions (07/309, points 1 and 2). Circular 02/80 set two ceilings for short sales on one issuer, and both applied: sale prices of at most 10% of assets, and a commitment of at most 5%. The commitment meant the cumulative unrealised loss on the short positions. All short-sale commitments together were capped at 50% of assets (02/80, sections A.1 to A.3).

A SIF or Part II UCI may borrow cash to invest, cover costs or meet redemptions. It may encumber assets to do so. For SICARs, the risk-capital principles in Chapter 5 limit borrowing (Circular 25/901, point 31).

Two carve-outs do real work in practice. Temporary borrowing that is fully covered by the capital commitments of investors is generally not counted as borrowing. A subscription line backed by commitments stays out of the number. Nor, in principle, is a debt security issued by the fund whose income is linked to portfolio performance (point 33).

All of this sits on top of the applicable leverage calculation, such as the AIFMD method, and does not replace it (point 34). The operational task is to classify each facility as investment, bridge or commitment-covered, and to keep the evidence. The sales document must state the maximum borrowing limit whenever the fund intends to borrow (point 46).

Launch in principle means the date of the first subscription (Circular 25/901, point 15(a)). The extension beyond 4 years applies only in exceptional circumstances. It must be duly justified to and accepted by the CSSF, and runs in principle for one year at most. Whatever the length, the ramp-up must stay reasonable for the fund's investment policy (point 15(b)).

While limits are switched off, the fund must not take on excessive risks or conflicts of interest that were not identified beforehand (point 17). A new fund or new compartment documents its ramp-up against these periods at authorisation; how visa practice treats an existing fund's PPM is open (see To verify). SICARs have no statutory risk-spreading duty, but may still write limits into their documents and use the same ramp-up and wind-down mechanics (points 13 and 18).

Older prospectuses are often silent on the unexecuted part of gated orders. Are they cancelled or carried forward? If carried, with what priority over new orders, and at which NAV (Circular 25/901, points 43-44)? The CSSF may approve a different treatment if it complies with the AIFMD where that applies and is justified to the CSSF (point 44).

Cross-check this disclosure against the liquidity management tools you select under AIFMD II, since the two need to describe the same mechanism (AIFMD II implementation tracker). Point 45 also confirms that a private-assets policy can justify a less-than-monthly redemption frequency, and that redemption and subscription frequencies need not match.

The authorisation file must describe how the SICAR meets the risk-capital requirement. The same applies for every new compartment of an existing umbrella SICAR. The sales document must include the risk-capital criteria, a non-exhaustive list of intended divestment routes and the expected holding period. A SICAR that invests through target funds must state that those funds meet the exit-strategy criteria (Circular 25/901, points 23-26).

Eligibility is clarified rather than changed. Point 21 lists the forms a contribution may take: capital contributions, loan origination, bond subscriptions, bridge financing and mezzanine financing, with secondary-market purchases also eligible. Point 27 then sets the restrictions. Distressed debt is in where the aim is value through restructuring; ABS and CDOs are in principle out; hedge funds generally out. Real estate and infrastructure come in only through intermediary vehicles or real-estate funds, and commodities never directly (points 21 and 27).

Where the SICAR invests through intermediary vehicles, it must have measures in place to show that incoming cash is actually used for risk-capital investments (point 27, last bullet).

The high-risk warning must also advise the average subscriber to invest only part of their long-term savings (Circular 25/901, point 47).

Life extensions are possible one year at a time, up to three times, where they are needed to let the investments reach their full potential. The fund's instruments of incorporation, or the compartment's sales document, must provide for them. The CSSF may derogate in exceptional circumstances on a duly motivated justification (point 49). Check your LPA wording before assuming a fourth extension is a formality.