Post-License Operational Readiness for CSSF Firms: Risk, Reporting, and Technology

CSSF Authorization Is Only the Beginning — Operational Readiness Is the Real Challenge

Receiving CSSF authorization as an AIFM or UCITS Management Company is a milestone — but your firm cannot begin managing assets until it becomes operationally ready.

Luxembourg imposes some of the highest standards in Europe across:

• Governance & decision-making
• Risk management
• Liquidity & stress testing
• NAV oversight
• Delegation monitoring
• Annex IV risk reporting
• AML/KYC compliance
• Technology infrastructure
• Internal controls & auditability

CSSF expects firms to prove, not merely state, that systems and processes are implemented effectively.

This article outlines exactly what Luxembourg firms must complete post-license before they can begin operating funds.

1. Risk Management Framework Implementation

Risk management is central to the CSSF’s expectations for AIFMs and UCITS ManCos.

Post-license requirements include:

• Implementing the documented risk management process
• Daily position & exposure monitoring
• Market, liquidity, concentration & counterparty risk tools
• Stress testing and scenario analysis
• Leverage monitoring (gross & commitment)
• NAV oversight / independent pricing checks
• Reporting risk breaches and escalation
• Independence between Risk & Portfolio Management

CSSF Focus Areas

• Independence of risk function
• Methodologies and risk models
• Liquidity monitoring
• Stress tests for AIFs (especially closed-end)
• UCITS VaR/Commitment approach

Why this matters

CSSF routinely challenges firms that claim risk oversight but cannot provide the systems or data to back it up.

2. Portfolio Oversight & Data Integration

Even when the portfolio management function is delegated, the AIFM/ManCo must prove active oversight.

Operational tasks include:

• Integrating data from admin, custodians, TAs
• Aggregating multi-source positions
• Reconciliation of cash, trades, and positions
• Validating NAV components
• Verifying corporate actions
• Monitoring exposures vs. investment guidelines
• Detecting pricing anomalies

CSSF Focus Areas

• Oversight of portfolio managers
• Independence from the fund administrator
• Ability to challenge NAV
• Audit trail of checks

Why this matters

CSSF considers insufficient oversight to be a core risk that may result in supervisory measures.

3. Annex IV and Regulatory Reporting Readiness

Annex IV is one of the most critical post-license obligations for AIFMs.

Your systems must support:

• Quarterly/semi-annual/annual Annex IV reporting
• Exposure breakdowns (AIFM-level & fund-level)
• Liquidity buckets
• Leverage calculations
• Counterparty exposures
• Stress test results
• Asset classifications
• Risk profile documentation

UCITS ManCos must also implement:

• UCITS risk reporting
• KIID/KID updates
• Depositary oversight reporting
• ESMA/PRIIPs data submissions

Why this matters

Incorrect Annex IV data is one of the most common causes of CSSF queries and supervisory follow-ups.

4. Liquidity Management & Stress Testing

For both AIFMs and UCITS:

Liquidity Tools Must Provide:

• Liquidity profiles of holdings
• Redemption coverage tests
• Stress testing under multiple scenarios
• Historical simulation
• Forward-looking hypothetical shocks
• Liquidity limits monitoring

CSSF Focus Areas

• Liquidity risk for open-ended funds
• Liquidity mismatch
• Redemption risk
• Stress test documentation

Why this matters

CSSF expects daily or weekly liquidity monitoring for open-ended strategies and detailed documentation of assumptions.

5. AML/CFT Framework & Investor Onboarding

Luxembourg requires robust AML processes, whether handled internally or by the transfer agent.

Post-license requirements include:

• Implementing KYC/KYB workflows
• PEP, sanctions, and adverse media checks
• Source of wealth / source of funds verification
• Investor risk scoring
• Ongoing AML/CTF monitoring
• FATCA/CRS data collection
• Register of beneficial owners
• Audit-ready documentation

Why this matters

Even when AML is outsourced, the AIFM/ManCo must demonstrate oversight and control over AML processes.

6. Governance & Internal Controls Activation

Luxembourg’s governance requirements are among the strictest in Europe.

Post-license obligations include:

• Board meetings (quarterly or more)
• Investment Committee & Risk Committee activation
• Documented minutes & decisions
• Internal registers for conflicts, complaints, breaches
• Oversight of delegated PMs & administrators
• Remuneration policy implementation
• Outsourcing monitoring & due diligence
• Internal audit plan (if applicable)
• Version control & policy updates

Why this matters

CSSF may request committee minutes, oversight documentation, and internal registers at any time.

7. Operational Resilience & IT Governance

Technology is now a core regulatory pillar for Luxembourg.

CSSF expects:

• Documented IT governance
• System access controls
• High availability & disaster recovery
• Penetration testing / cybersecurity controls
• Clear outsourcing agreements with IT vendors
• Data residency and data integrity controls
• Backups, encryption, retention policies

Why this matters

IT governance is one of the most overlooked readiness areas — and a major topic during CSSF supervision.

8. Fee Calculation & NAV Oversight

Funds must implement:

• ‍Management fee models
• Performance fees (with high-watermark rules)
• Equalisation (if applicable)
• Expense monitoring
• Fee accrual reconciliations

CSSF Focus Areas

• Accuracy of performance fees
• Transparency
• Consistency with LPA/prospectus
• Auditability

9. Investor Reporting & Communications

Luxembourg investors expect institutional-grade reporting.

Required Components:

• Capital call/distribution notices
• Quarterly investor reports
• Exposure breakdowns
• Performance metrics
• Risk summaries
• ESG reporting (if applicable)
• Annual reports & audited financials

Why this matters

Depositaries, auditors, and investors expect consistent, accurate, and timely reporting.

10. The Complete CSSF Post-License Operational Readiness Checklist

Risk

• Risk framework implemented
• Daily exposure & monitoring tools live
• Stress testing active
• Liquidity risk implemented
• NAV oversight in place

Portfolio Oversight

• Multi-source data integrated
• Reconciliation in place
• Oversight of delegates active

Reporting

• Annex IV data engine configured
• UCITS risk reporting workflows active

AML/KYC

• Investor onboarding workflows
• Ongoing AML monitoring

Governance

• Committee structures active
• Registers & audit trails active

Technology

• PMS, risk, reconciliation, AML systems
• IT governance documentation complete

Operations

• Fee engine
• Reporting templates
• Document vault/environment live

Why CSSF Firms Choose Reluna for Post-License Operational Readiness

Reluna provides everything CSSF firms need to go live efficiently and compliantly.

Reluna includes:

• Portfolio management & analytics
• Multi-custodian data aggregation
• Full reconciliation engine
• Annex IV reporting data preparation
• Liquidity & risk dashboards
• Stress testing
• Oversight of external portfolio managers
• AML/KYC onboarding
• Document vault & audit trail
• Governance & compliance workflows
• Fee & expense engine
• Investor portal (white-labeled)
• Multi-fund & multi-entity support

Reluna benefits:

• Reduces operational risk
• Ensures regulatory alignment
• Strengthens oversight & governance
• Creates a single source of truth
• Simplifies CSSF inspections
• Scales across RAIF/SIF/SICAV umbrellas

Reluna is built for full operational readiness from day one.

Next Steps

If you’ve recently received CSSF authorization — or expect approval soon — now is the ideal moment to finalize your operational launch.

👉 Request a Reluna demo to see how we help CSSF-regulated firms activate full operational readiness in weeks, not months.