The RC's annual report to the board (Art. 42(6) CSSF Reg. 12-02)
By the RC Insight team, practitioners who have helped more than 80 fund promoters set up their AML/CFT framework since 2020.
Published Last reviewed: 10 min read
The RC's annual report to the board is the summary report required by Article 42(6) of CSSF Regulation 12-02: at least once a year, the RC (the AML/CFT compliance officer) prepares a summary report on its activities and operation and submits it to the RR, the authorised management and the board. The article lists no headings.
This guide is part of our guide to annual AML/CFT reporting for Luxembourg funds.
Key takeaways
- Article 42(6) of CSSF Regulation 12-02 requires the RC to prepare, at least once a year, a summary report on its activities and operation for the RR, the authorised management and the board.
- The article lists no headings: the structure in this guide is our recommendation, not a mandatory template.
- A CSSF-supervised fund with a Luxembourg IFM does not file its own SRRC, but its RC must still prepare the Article 42(6) report; the CSSF may request it.
- CSSF Regulation 12-02 does not require the board to approve the report; the SRRC asks for confirmation that the findings contained in the report were presented to and acknowledged by the board.
- For a RAIF, in our practice, the annual report to the board is the same document as the RC report sent to the AED, with the risk assessment attached.
On this page
- What Article 42 of CSSF Regulation 12-02 requires
- Annual report to the board and SRRC: the same document?
- CSSF-supervised funds with a Luxembourg IFM: the report still exists
- A recommended structure for the RC's annual report to the board
- Presenting the annual report to the board
- RAIFs and other AIFs: our practice for the board report
- How RC Insight helps
- FAQ
- Sources
What Article 42 of CSSF Regulation 12-02 requires
Article 42 of CSSF Regulation 12-02 organises the RC's reporting in three layers: regular written reports, an annual summary report and, for some entities, the filing of that report with the CSSF.
| Paragraph | What it says | Who receives it |
|---|---|---|
| Article 42(5) | Written reports on a regular basis and, if necessary, ad hoc, covering the follow-up of past recommendations, new problems and shortcomings, the related risks and their seriousness, and the corrective measures proposed. | The RR, the authorised management and, where appropriate, the board. |
| Article 42(6) | At least once a year, a summary report on the RC's activities and operation; no headings are listed. | The RR, the authorised management, the board and, where appropriate, the specialised committees. |
| Article 42(7) | The RR submits the summary report to the CSSF every year within five months after the financial year-end. | The CSSF, except for Luxembourg funds whose designated Luxembourg management company submits the report. |
The regular reports also allow judging the adequacy of the AML/CFT policy, procedures and systems and the collaboration between departments. The RR sits at the level of the authorised management or the board, and funds and IFMs may appoint a third party as RC (Article 40). In our view, the annual report should summarise what the regular reports raised, not start from scratch. The whole text is on our page on CSSF Regulation 12-02.
Annual report to the board and SRRC: the same document?
For the entities that file it, the SRRC is the RC's summary report in the form the CSSF collects: it is based on Article 42(6) and (7) of CSSF Regulation 12-02. Governed by CSSF Circular 24/854, it is prepared by the RC and submitted by the RR on eDesk within five months after the closing of the annual accounts: 31 May 2027 for a 31 December 2026 year-end. Its template has 15 sections; its General Information section includes a confirmation that the findings contained in the report have been presented to and acknowledged by the board. For entities in the scope of the SRRC, the board and the RR may require additional RC work, such as information on suspicious transaction reports or on refusals to enter into business relationships, whose data points do not have to be communicated to the CSSF (SRRC FAQ 2B).
We recommend a single narrative report to the board that reuses the SRRC data and is presented before filing, so that the confirmation in the template reflects a real discussion. Details in our guide to the SRRC.
CSSF-supervised funds with a Luxembourg IFM: the report still exists
A CSSF-supervised fund with a Luxembourg IFM does not file its own SRRC, but its RC must still prepare, at least once a year, the summary report required by Article 42(6) for the RR, the authorised management and the board. It is not sent to the CSSF automatically, but the CSSF may request it (SRRC FAQ 2A).
| Entity | Report to the board | What reaches the supervisor |
|---|---|---|
| Luxembourg IFM, including registered AIFMs | Article 42(6) summary report | The SRRC, via eDesk, within five months after year-end |
| CSSF-supervised fund with a Luxembourg IFM | Article 42(6) summary report | Nothing automatically; the CSSF may request it |
| CSSF-supervised fund, self-managed or with a foreign IFM | Article 42(6) summary report | Its own SRRC, via eDesk |
| RAIF | In our practice, the AED RC report, with the risk assessment attached | AED questionnaire and RC report, due by 31 May, a date the AED confirms each year |
| Other AIF supervised by the AED | In our practice, the same standard as for RAIFs | In 2026, the RC report was filed only on AED invitation |
A recommended structure for the RC's annual report to the board
Article 42(6) lists no headings for the annual report. The structure below is our recommendation, not a mandatory template. It crosses Article 42(5), the twelve topics of the AED RC report, the board confirmation in the SRRC, the LPEA template and our own annual reports.
| Recommended heading | What to put in it | Source that inspired it |
|---|---|---|
| Fund identification | Exact name, RCS number, legal form, reference period, RR and RC in office. | AED topic on name and RCS number; LPEA "The Fund". |
| The RC function | Time spent, resources, access to data, escalations, changes of RR or RC. | Article 40(3) on timely access to data; Article 42(6); LPEA governance chapter. |
| Fund and risk profile | Strategy, investor base, distribution and the ML/TF risk assessment: inherent risk, mitigating measures, residual risk, changes. Attach it. | AED topic on risk assessment; SRRC Risk Assessment section; the assessment must still be performed and documented. |
| Investor due diligence | Onboarding and ongoing monitoring, PEPs, intermediaries, periodic reviews by risk level, blocked positions, refusals. | AED topics on customers, intermediaries, PEPs, blocked positions, periodic review; SRRC FAQ 2B; LPEA chapters on investors, PEPs, intermediaries. |
| Asset due diligence | Method, assets reviewed, red flags and how they were cleared. | AED topic on the fund's assets; CSSF FAQ on asset due diligence; LPEA chapter on assets. |
| Delegate oversight | Results of controls on the transfer agent, the AIFM or portfolio managers and distributors; reasons for choosing new delegates. | AED topic on delegated tasks; Article 37 of CSSF Regulation 12-02; LPEA delegation chapters. |
| Suspicious transactions and sanctions | Number and amounts of reports to the CRF and under financial sanctions, zero stated explicitly. | AED statistics topics; SRRC FAQ 2B; LPEA statistics chapter. |
| Regulatory and fund changes | New texts and changes to the fund (strategy, sub-funds, delegates, investors) and their impact. | LPEA conclusion; our own annual reports. |
| Training | Training of the board, the RC and the people involved: dates and topics. | LPEA section 2.6 on training and awareness; our own annual reports. |
| Findings and recommendations | New problems and shortcomings, their seriousness, corrective measures with owner and date, status of previous recommendations, number of breaches. | Article 42(5); SRRC findings register; AED topic on breaches; LPEA chapters on breaches and follow-up. |
| The RC's overall opinion | A clear judgement on the adequacy of the policy, procedures and systems and on the collaboration with delegates. | Article 42(5) on judging adequacy; LPEA conclusion. |
| Board presentation and annexes | Meeting date, acknowledgement and decisions; annexes such as the risk assessment and the findings log. | SRRC board confirmation; for RAIFs, our practice of attaching the risk assessment. |
Findings are easier to write from an annual monitoring plan.
A pre-operational fund
Every Luxembourg investment fund must appoint both an RR and an RC. In our view, a fund without investors still needs its annual report. We recommend stating explicitly that no investor had been admitted during the period, then describing the set-up: approved policy, initial risk assessment, due diligence on the initiator and the delegates. For RAIFs, the AED already asks for the number of breaches to be stated explicitly, even when it is zero.
The LPEA template
The LPEA AML Expert Working Group published a "Template Annual AML/CFT Report of the RC" (final version, April 2025) for RAIFs and other unregulated AIFs, to be approved by the board/RR and filed with the AED. It has twelve chapters and states that it is not advice or official guidance. It is an industry template, not a rule. To compare a template with a dedicated tool, see RC Insight compared with Excel.
Presenting the annual report to the board
CSSF Regulation 12-02 does not require the board to approve the RC's summary report; it requires board validation of the AML/CFT policy (Article 38(4)). The SRRC asks for confirmation that the findings contained in the report have been presented to and acknowledged by the board. The LPEA template, by contrast, provides for approval by the board/RR.
We recommend documenting the discussion: send the report ahead of the meeting, present the findings in person, and record in the minutes the board's decisions and who owns each action. Article 42(5) expects the RC's regular reports to follow up past recommendations. We recommend that next year's annual report does the same. For the board's side, see the questions a fund board should ask its RC.
RAIFs and other AIFs: our practice for the board report
A RAIF is supervised by the AED for AML/CFT, even when its AIFM is CSSF-authorised. The AED RAIF guide (March 2023) describes the RC report as a summary report on the RC's AML/CFT activities and operation at the RAIF, echoing the wording the CSSF uses for professionals it supervises (Article 42(6)). It covers at least twelve topics, in a signed PDF; the AED publishes no template.
In its 2022 ML/TF sub-sector risk assessment for the collective investment sector, the CSSF asked entities to improve the quality of RC reports and recommended that entities outside the scope of Circular 18/698 consider its requirements as best practice. The 2025 update does not repeat this recommendation.
In our practice, for a RAIF the RC's annual report to the board is the same document as the RC report sent to the AED, with the fund's ML/TF risk assessment attached. We apply the same standard to the other AIFs supervised by the AED.
For reference year 2026, the RAIF deadline is expected to be 31 May 2027, a date the AED confirms each year. Details: the AED RC report for RAIFs and AED reporting for unregulated AIFs.
How RC Insight helps
The monitoring plan lets you plan the year's AML/CFT controls for each fund, record each test with its evidence, and follow findings to closure. You prepare the AED questionnaire and RC report and the CSSF report section by section in the platform, and track progress to submission. Every action is logged with its author and date, so you can show the board, the auditor or the supervisor who did what, and when. See our SRRC and AED report features and our RC software. Start with the free RC Annual Reporting Playbook 2027, or ask for a demo.
FAQ
Is the RC's annual report to the board mandatory for a CSSF-supervised fund with a Luxembourg management company?
Yes. A CSSF-supervised fund with a Luxembourg IFM does not file its own SRRC, but its RC must still prepare, at least once a year, the summary report required by Article 42(6) of CSSF Regulation 12-02 for the RR, the authorised management and the board. The CSSF does not receive it automatically but may request it (SRRC FAQ 2A).
Does the board have to approve the RC's annual report?
CSSF Regulation 12-02 does not require the board to approve the RC's summary report; it requires board validation of the AML/CFT policy (Article 38(4)). The SRRC asks for confirmation that the findings contained in the report have been presented to and acknowledged by the board. In our view, the minutes should record it.
Is the annual report to the board the same as the SRRC?
Not exactly. The SRRC is based on Article 42(6) and (7) of CSSF Regulation 12-02: it is the summary report in the template the CSSF collects on eDesk, submitted by the RR within five months after year-end. We recommend a narrative report to the board that reuses the SRRC data and is presented before filing.
What headings must the RC's annual report contain?
None are imposed: Article 42(6) of CSSF Regulation 12-02 lists no headings for the annual summary report. For RAIFs and other AIFs, the AED expects at least twelve topics in the RC report. Our recommended structure crosses these sources with Article 42(5), the SRRC template and the LPEA template.
Does a RAIF need an annual RC report for its board?
The AED RAIF guide describes the RC report as a summary report on the RC's AML/CFT activities and operation at the RAIF. In our practice, the annual report to the board is that same document, with the fund's ML/TF risk assessment attached. We apply the same standard to the other AIFs supervised by the AED.
When should the RC present the annual report to the board?
Article 42(6) only says at least once a year. Where an SRRC is filed, it asks for confirmation that the findings contained in the report have been presented to and acknowledged by the board, and filing is due within five months after year-end. We recommend a board meeting early enough to leave time for corrections before the deadline.
Sources
- CSSF Regulation No 12-02 (consolidated), Articles 37, 38, 40 and 42: cssf.lu
- CSSF Circular 24/854 (SRRC): cssf.lu
- CSSF FAQ on the AML/CFT Summary Report RC (questions 2A and 2B): cssf.lu
- CSSF SRRC user guide: cssf.lu
- CSSF FAQ on AML/CFT asset due diligence: cssf.lu
- CSSF ML/TF sub-sector risk assessment, collective investment sector (2022): cssf.lu
- AED RAIF guide (March 2023): pfi.public.lu
- AED, RC report for RAIFs: pfi.public.lu · for other AIFs: pfi.public.lu
- LPEA AML Expert Working Group, Template Annual AML/CFT Report of the RC (April 2025, industry template): lpea.lu