Ethics and governance in the European Financial centers

The Agefi in France has reported what Charles Muller, who is deputy managing director of the ALFI, said to reassure the investor. “There does not exist any difference between the French and Luxembourg legislations as regards responsibility for the agent”, he said .
In a document the ALFI states that article 1932 of the Luxembourg Civil code makes on request weigh on the depositary “an obligation of restitution of the assets of the client.”

What does article 1932 exactly states ?

Art. 1932. Le dépositaire doit rendre identiquement la chose même qu'il a reçue.
Ainsi, le dépôt des sommes monnayées doit être rendu dans les mêmes espèces qu'il a été fait, soit dans le cas d'augmentation, soit dans le cas de diminution de leur valeur

Free translation

Article 1932. The depositary must return identically the thing as it received.
Thus, the deposit of the monnayées cashed in on sums must be returned in the same species that it was made, either in the case of increase, or in the case of reduction in their value

Should the article be applicable to investments, this would mean that in Luxembourg the investor never loose the money even though the value of shares at the Stock Exchange is decreasing or the NAV of UCITS is decreasing.

In other words, according to the ALFI, if the investor invest EUR 1 billions in Luxembourg and because of the markets the value decrease to EUR 500 million he or she can ask the professionel to receive his EUR 1 billion backj.


In a market that is decreasing I can only encourage every investor in Luxembourg that lost money in the past months to ask the for the refund of the money invested.