NAV error correction across domiciles — materiality thresholds and remediation, compared
If you run fund operations across more than one domicile, the same NAV error gets five different answers. A 0.4% pricing error on an equity fund is below every threshold in Luxembourg, reportable to nobody in the UK if the depositary shrugs, below Jersey's notification trigger, but already past Guernsey's record-and-report line and past Ireland's industry-practice materiality mark. No regulator publishes this comparison; the law firms publish it one domicile at a time, on the day the rule changed. This page holds the current position side by side.
Two vocabulary notes before the matrix. A materiality (tolerance) threshold is the error size — as a % of NAV or of the unit price — above which the formal machinery (regulator notification, NAV recalculation, compensation) switches on; below it, you fix the cause and move on. De minimis is different: it caps the individual payout, not the error — a per-investor amount below which compensation is not paid out even when the error was material.
The master matrix
| Domicile | Materiality threshold | Notify the regulator? | Notify / compensate investors? | Primary source |
|---|---|---|---|---|
| Luxembourg | Prescribed, tiered: MMF 0.20% · bond & mixed UCITS 0.50% · equity & other-asset UCITS 1.00% · same grid for retail Part II UCIs/ELTIFs · professional-only vehicles (SIF, SICAR, reserved Part II/ELTIF, EuVECA/EuSEF) self-set with a documented analysis, hard cap 5% | Yes — every significant error, via the CSSF notification form, within 4–8 weeks of detection; monthly progress updates while compensation runs | Yes — recalculate the NAVs for the error period, compensate aggrieved subscribers/redeemers and the fund itself; de minimis allowed for investor payouts only, never for amounts owed to the fund | CSSF Circular 24/856 (pts 35, 41–47, 123–127, 158), in force 1 Jan 2025 + CSSF FAQ |
| Ireland | No binding threshold in force. CP130 proposed MMF 0.10% / all other funds 0.50% plus a qualitative overlay — never finalised. Industry practice runs on Irish Funds guidance at 0.5% of NAV | Yes, but under general breach-reporting rules, not an error-specific regime: fund management company under CB UCITS Regs, Reg 107(2); depositary reports material breaches (Reg 118(3)) and non-material ones unresolved after 4 weeks (Reg 118(4)); AIF Rulebook mirrors for AIFs | Industry practice: redress where material and investors directly affected; customary de minimis €50 retail / €500 institutional (as recorded in CP130) — none of it codified | CBI CP130 (2019, unfinalised); CB UCITS Regulations |
| UK (authorised funds) | No percentage in the rules. Reimbursement is the default unless the depositary judges the breach "of minimal significance" (COLL 6.6.3R(4)) — pure depositary judgment; 0.5% survives only as legacy industry convention | Only if "significant" under the general notification rule SUP 15.3.11R (factors: customer losses, frequency, systems implications, delay in fixing) — no error-specific form or deadline | Yes by default — AFM must rectify immediately and extend rectification to reimbursement of unitholders or the scheme (COLL 6.6.3R(3)(c)), unless the depositary waives under minimal significance | FCA COLL 6.6.3R; SUP 15.3.11R |
| Jersey | None for correction. A 0.5% notification trigger exists for retail certified funds (Code Sch 1, s.6.7.6) — it triggers a report, not a remediation regime. Expert funds: no pricing-error provision at all | Retail certified funds: yes — pricing errors >0.5% of unit price, "as soon as the Fund becomes aware" (Sch 1, s.6.7.6); a failed NAV calculation is separately notifiable (s.6.7.8) | Silent. The Code prescribes no correction method, no compensation duty, no de minimis — remediation is governed by the fund's own documents and the general fair-treatment principles | JFSC Certified Funds Code, Sch 1 |
| Guernsey | Two-step, prescribed in guidance: ≥0.1% of unit price — record, report to the Trustee, fix the cause; ≥0.5% — Trustee reports to the GFSC and compensation is normally required | Yes — Trustee must report all incorrect pricing ≥0.5% to the Commission, with a prescribed information pack (appendix to the guidance) | Yes at ≥0.5% — compensation chart allocates payment between fund, manager, incoming and outgoing holders; per-investor de minimis applies (figure under verification); below 0.5% normally no compensation if the manager can demonstrate the prescribed pricing controls | GFSC Guidance — Pricing Controls in respect of Open-Ended Collective Investment Schemes (ss.5.1–5.7) |
The one-line read: Luxembourg and Guernsey prescribe; the UK delegates to the depositary; Jersey notifies but doesn't remediate; Ireland proposed a regime in 2019 and never finished it.
Luxembourg — the most prescriptive regime, recently rebuilt
CSSF Circular 24/856 entered into force on 1 January 2025 and repealed Circular 02/77, the 2002 text everyone had memorised (pt 162). Errors detected before that date still run under 02/77 (pt 163). A CSSF FAQ (v1, 24 December 2024) sits alongside it.
Thresholds (pt 35)
| Vehicle | Tolerance threshold (% of NAV) |
|---|---|
| MMFs under the MMF Regulation (Table 1) | 0.20% |
| UCITS — bond or mixed policy (Table 2) | 0.50% |
| UCITS — equity or other eligible assets (Table 2) | 1.00% |
| Part II UCIs & ELTIFs open to retail (Table 3) | 0.50% / 1.00% by policy, as Table 2; may exceed 1% for "other assets" only with a documented analysis and investor disclosure |
| Part II/ELTIF reserved to professional or well-informed investors, SIFs, SICARs, EuVECAs, EuSEFs (pt 35(d)) | Self-set by the dirigeants/IFM on a documented analysis, Table 3 as the reference point; never above 5%, and 5% may not be used as a default |
Points worth an ops checklist entry: thresholds are set per sub-fund, one threshold across all share classes (pt 37(i)); fund-of-funds, index trackers and feeders look through to the target exposure (pt 37(iv)); a stricter foreign distribution-country threshold, once adopted, applies to the whole sub-fund and every investor in it (pt 37(v)); and sub-threshold errors that run simultaneously or in succession are aggregated — if they stack past the threshold together, they count as significant (pt 38). Closed-ended UCIs are out of scope of the NAV-error chapter entirely and file no NAV-error notifications (pt 27 area, Ch. 4 scope).
Notification (pts 152–158)
Every significant error goes to the CSSF on its prescribed form — all fields, no format edits, quantitative impact calculation attached; incomplete filings are refused. Deadline: 4 to 8 weeks from detection. Where compensation reaches many investors across jurisdictions, the filing still goes in on time and the compensation date follows via the complete form, with monthly progress updates. Where the réviseur d'entreprises agréé (the fund's approved statutory auditor) must produce a special report, it is due within 3 months of the complete notification (pt 157). The CSSF does not approve your remediation — it takes the filing and reserves the right to intervene ex post (pts 159–160). Host-country regulators of any market where the fund is distributed must also be informed per local rules (pt 161).
Remediation (pts 39–47, 123–133)
Recalculate the NAV for every error date; compensation is compulsory only for the dates the error was significant (pt 39). Undervalued NAV: compensate redeeming investors and the fund; overvalued: compensate subscribing investors and the fund (Tables 4–5). The financial impact runs on a compound or non-compound method — pick one in your procedures and apply it consistently (pt 47). A de minimis amount (a lump sum reflecting actual bank charges, documented per fund or sub-fund) may be applied to investor payouts, but never to amounts owed to the fund — those are paid down to the last unit of currency (pts 124–127). Compensation by allocating extra units skips de minimis entirely (pts 128–129). Clawback from investors who accidentally gained is acceptable for well-informed/professional investors, "in principle not appropriate" for retail (pt 44). Unclaimable amounts owed to departed investors go to the Caisse de Consignation, Luxembourg's state deposit office for unclaimed funds (pt 132). And the sting: the costs of running the correction cannot be charged to the fund (pt 133).
Ireland — a framework proposed in 2019, still not in force
The Central Bank consulted on a full errors framework in CP130 — Treatment, Correction and Redress of Errors in Investment Funds (published 9 September 2019, closed 9 December 2019). It defined four error types — NAV error, investment breach error, fee error, control breach error — and proposed quantitative thresholds of 0.10% of NAV for MMFs and 0.50% for all other funds, overlaid with qualitative materiality factors, plus an obligation to notify investors of any material error whether or not redress follows.
Then nothing. The feedback statement was deferred in April 2020 (COVID measures per the CBI's flexibility announcement) and, as at the last-verified date of this page, the CP130 page lists no feedback statement and no final rules. In the meantime the operative regime is stitched together from general obligations:
- Reporting: the fund management company reports breaches and significant events under Regulation 107(2) of the Central Bank UCITS Regulations (AIF Rulebook equivalent for AIFs); the depositary reports material breaches under Regulation 118(3), reports non-material breaches unresolved after four weeks under 118(4), and keeps a written record of every breach under 118(5)(a) — all as summarised in CP130 itself.
- Materiality: Irish Funds industry guidance treats a NAV impact of 0.50% or greater as material — industry guidance, not a Central Bank rule.
- De minimis: the industry-standard limits recorded in CP130 are €50 for retail investors and €500 for institutional investors — again, practice, not rule.
For a cross-border ops team the practical consequence is inverted comfort: Ireland feels like Luxembourg because administrators apply near-identical playbooks, but the playbook has no statutory floor. If a counterparty disputes a remediation, you are arguing industry guidance, not a circular.
UK — principles-based: the depositary is the threshold
For FCA-authorised funds (UCITS-style and NURS), the rule is COLL 6.6.3R. The authorised fund manager must "take action immediately to rectify any breach of COLL 6.3 [valuation and pricing] and, where the breach relates to the incorrect pricing of units… the rectification must… extend to the reimbursement or payment" of money to unitholders or the scheme — unless, under COLL 6.6.3R(4), "it appears to the depositary [the] breach is of minimal significance."
That is the whole materiality regime. No percentage appears in the FCA Handbook. The widely-cited 0.5% mark is an inheritance from pre-FCA regulator guidance that survives as depositary and industry convention — treat it as a convention you must evidence, not a rule you can cite. Regulator notification runs through the general significant-breach rule, SUP 15.3.11R, where significance weighs potential customer losses, frequency of the breach, systems-and-controls implications and any delay in identifying or rectifying it — again, no error-specific form or deadline.
For UK AIFs outside the authorised-fund regime (the FUND sourcebook world), there is no pricing-error regime at all: AIFMD-derived valuation obligations govern how the NAV must be produced, and what happens after an error is a matter for the fund documents and the general duty to treat customers fairly. That silence is the position — plan for it in the LPA or prospectus, because no rule will fill the gap.
Jersey — a notification trigger, not a remediation regime
Jersey's retail certified funds carry the domicile's only explicit number: under the Certified Funds Code of Practice, Schedule 1, s.6.7.6, "an error in the pricing of Units of the Fund greater than 0.5 per cent" must be reported to the JFSC as soon as the Fund becomes aware. A failed NAV calculation is separately notifiable (s.6.7.8), and valuations must be "prepared in an appropriate, regular and timely manner" (s.3.8.1).
And that is where it stops. The Code prescribes no correction methodology, no compensation duty, no de minimis, no investor-notification rule for pricing errors. Expert funds (Schedule 2) have no pricing-error provision at all — only the general code obligations, including dealing with the JFSC openly and notifying material matters. Jersey Private Funds sit outside the certified regime entirely. Remediation in Jersey is therefore governed by the fund's constitutional documents, the administrator's service contract, and the governing body's fiduciary judgment — in practice, boards commonly borrow the Luxembourg or Guernsey playbook, but nothing obliges them to.
Guernsey — prescriptive, but by guidance and trustee discretion
Guernsey's regime lives in a GFSC guidance note, Pricing Controls in respect of Open-Ended Collective Investment Schemes, applying to open-ended authorised and registered schemes under the Protection of Investors Law 1987. It is guidance the Commission applies when enforcing the Rules, and it works on two trip-wires:
- ≥0.1% of the unit price — record it, report it to the Trustee with the corrective action taken, and fix the cause (s.5.1).
- ≥0.5% — the Trustee reports it to the Commission with a prescribed information pack (dates, cause in detail — "human error" is called out as insufficient — per-day % impact, investors affected, compensation paid; see the guidance appendix), and compensation is normally required (ss.5.1, 5.3).
Below 0.5%, no compensation is normally required — but only if the manager can demonstrate compliance with the prescribed pricing-control standards (ss.2.1–2.14: price-source review, delegate oversight, monthly reconciliations to the Trustee's records, movement-limit checks signed off by senior staff, and more). No controls, no safe harbour (s.2, opening rubric). Where an error persists across days, compensation is owed only for the days the error was ≥0.5%, and multiple simultaneous causes are combined (ss.5.3.3–5.3.4). A compensation chart (ss.5.4–5.6) allocates who pays whom across fund, manager, incoming and outgoing holders; a per-investor de minimis applies to payouts (s.5.4.1 — figure under verification below); and clawback from investors who gained is a matter for the manager's legal and commercial judgment (s.5.7). Throughout, "normally" is defined to mean "unless the Trustee directs otherwise" — the Trustee, not the Commission, is the day-one decision-maker, including on whether a manager may rely on de minimis at all (s.4.3).
What this means at the desk
Three operational traps fall straight out of the comparison. First, threshold arbitrage inside one umbrella: a Luxembourg equity UCITS tolerates 1.00% where its Irish twin runs at the 0.5% industry mark and its Guernsey mirror trips a regulator report at 0.5% — identical error, three different filings. Second, the cross-border ratchet: Luxembourg's pt 37(v) imports the strictest distribution-country threshold and applies it to every investor in the sub-fund, so a UK or Nordic registration can quietly tighten your Luxembourg tolerance. Third, the aggregation rule: Luxembourg counts stacked sub-threshold errors as one significant error; Guernsey combines simultaneous factors day-by-day; nobody else says anything — so an error log that looks clean domicile-by-domicile can still be reportable in Luxembourg.
The practical gotcha: in Luxembourg the correction costs stay with whoever caused the error — they cannot touch the fund (24/856 pt 133) — and in Guernsey the de minimis safe harbour evaporates retroactively if your pricing-control file is thin (guidance s.2). The cheapest remediation in both islands is the one you evidenced before the error happened.
To verify
- Guernsey de minimis figure — the publicly posted guidance is a black-lined version showing the per-investor de minimis amended (reads "£3010", i.e. £30 struck / £10 inserted or vice versa, s.5.4.1). Confirm the clean final figure and the guidance's issue date against the GFSC's current published version.
- UK 0.5% convention — confirm whether any current Depositary and Trustee Association / Investment Association guidance still documents the 0.5% pricing-error convention, and its exact formulation; the FCA Handbook itself contains no percentage.
- Ireland CP130 status — no feedback statement found on the CBI's CP130 page as at 2026-07-05; confirm whether the errors framework has been folded into any current CBI workstream (e.g. supervisory priorities or a Central Bank UCITS Regulations amendment cycle).
- Irish depositary 4-week rule — Regulations 107(2) and 118(3)–(5) are cited here as summarised in CP130 (2019); confirm the numbering in the current consolidated Central Bank UCITS Regulations.
- Jersey Schedules 3–5 — Schedule 1 (retail certified funds) carries the 0.5% notification trigger and Schedule 2 (expert funds) does not; Schedules 3–5 of the Certified Funds Code not yet checked for equivalent provisions.
- CSSF FAQ currency — FAQ cited is Version 1 (24 December 2024); check for later versions.
Changelog
- 2026-07-05 — page created. Initial matrix from primary sources: CSSF 24/856 + FAQ v1, CBI CP130 + Central Bank UCITS Regulations (as cited therein), FCA COLL 6.6.3R / SUP 15.3.11R, JFSC Certified Funds Code Sch 1 & 2, GFSC pricing-controls guidance.