Luxembourg Investment Fund ¦ Prospectus ¦ suggested wording for a “Financial Crime Risk Notice”
Anyone investing in an investment fund expects clear information about opportunities and risks. In addition to traditional risks such as market fluctuations or interest rate changes, information on money laundering, terrorist financing, proliferation financing and other forms of financial crime is becoming increasingly important.
Legislation requires investment funds to provide investors with comprehensive information about all relevant risks. The background to this is that investment funds - despite diverse and diligent controls - could in principle be misused for illegal activities. An investment fund can be affected both directly, for example through transactions, and indirectly, for example through assets or business partners that have become problematic. This includes the illegal funds movement (money laundering), the financing of terrorism or the provision of funds for the proliferation of weapons of mass destruction. Other forms of financial crime such as fraud or breaches of sanctions cannot be completely ruled out either.
Risk notices create transparency and enable investors to better assess the potential impact on their investment. This includes, for example, official investigations, frozen accounts, financial losses or reputational damage to the investment fund. With a clear presentation of risk, fund providers promote responsible investment decisions and strengthen confidence in the integrity of the financial system.
