European Union: Key Regulatory Developments In Luxembourg - January 31, 2019

Last Updated: 12 March 2019
Article by Eduard Koster and Bruno Hrovat
Source/Date Brief description

CSSF1

15/01/2019

Investment funds

Memorandum of understanding ("MoU") on Luxembourg – Hong Kong mutual recognition of funds (the "MRF") signed between the Securities and Futures Commission and the CSSF

The MoU allows eligible Hong Kong mutual funds and Luxembourg UCITS2 to be sold and distributed in each other's market via a streamlined process.

The SFC and the CSSF may extend the MRF to other types of funds in the future.

To access the text of the press release, click here.

CSSF

14/01/2019

Investment funds

Notification forms regarding the provision of services on a cross-border basis by Luxembourg fund managers published by the CSSF

The notification forms have been produced by the CSSF to standardize and facilitate the authorization processes for UCITS management companies and AIFMs.3

To access the text of the press release, click here. To access the notification forms, please click here.

Luxembourg Parliament

13/01/2019

AML

Law establishing the beneficial owner register (the "BOR") published

The law has implemented article 30 of the 4th AML Directive4 by providing for the establishment of the BOR, data collection, access rights, as well as criminal sanctions for breaches.

To access the text of the law in French, click here.

CSSF

11/01/2019

Investment funds

Joint statement on the treatment of share cancellation under the EU money market funds regulation5 (the "MMF Regulation") issued by the Central Bank of Ireland (the "CBI") and the CSSF

Through the joint statement, the CBI and the CSSF wish to converge their supervisory approaches and provide guidelines to financial market participants with respect to the cessation of the use of the reverse distribution mechanism (also known as share cancellation or share destruction), a practice considered incompatible with the MMF Regulation by the European Commission.

To access the text of the press release, click here.

CSSF

10/01/2019

Listed companies

Enforcement priorities regarding the 2018 financial reporting for issuers subject to the Transparency Law6clarified by the CSSF

At the start of the listed companies' annual reports preparation process, the CSSF has stressed in its press release 19/02 it will pay particular attention to financial statements drawn up pursuant to the International Financial Reporting Standards. The CSSF elaborates the European common enforcement priorities, identified by the European Securities and Markets Authority.

To access the text of the press release, click here.

Luxembourg Parliament

21/12/2018

Tax

Law on the fight against tax avoidance practices published

The law addresses aggressive tax planning by (i) implementing the Directive 2016/1164 laying down rules against tax avoidance practices that directly affect the functioning of the internal market (and) clarifying certain other provisions of the Luxembourg tax legislation which in the past had been used by certain tax residents to erode their tax base.

To access the text of the law in French, click here.

CSSF

21/12/2018

Fintech

White paper on artificial intelligence (AI) published by CSSF

Based on a research study conducted by the CSSF, it has no binding value vis-à-vis supervised institutions but aims to shed light on AI and some practical use cases for the financial sector. Furthermore, it covers the analysis of the main risks associated with AI technology and provides some key recommendations to take into account when implementing AI inside a business process.

To access the text of the white paper, click here.

CSSF

20/12/2018

AML

Circular 18/702 on developments regarding the fight against money laundering and terrorist financing (AML/CFT) in the "private banking" sector

The circular is addressed to banks and other professionals of the financial sector that provide private banking services, including wealth management and related activities. The CSSF has identified an increased risk underlying private banking and provided guidance to concerned actors to tackle the matter.

To access the text of the circular in French, click here.

CSSF

17/12/2018

Payment services

Circular 18/704 on European Banking Authority Guidelines (EBA) on major incident reporting under Directive (EU) 2015/2366 (PSD2), (EBA/GL/2017/10) issued by the CSSF

The circular draws attention of payment services providers to the EBA guidelines and provides them details on reporting major operational or security incidents under the Payment Services Law.7

To access the text of the circular, click here.

CSSF

17/12/2018

Banks

Circular 18/703 on the introduction of a semi-annual reporting of borrower related residential real estate (RRE) indicators issued by the CSSF

The circular introduces a macro-prudential risk-monitoring framework for the RRE sector in Luxembourg, by defining and collecting indicators on lending standards. The CSSF will collect the data semi-annually in April and October via a template annexed to the circular.

To access the text of the circular, click here.

CSSF

04/12/2018

Banks

CSSF Regulation 18-06 concerning systemically important institutions authorized in Luxembourg published

The CSSF identified no global systemically important bank in Luxembourg. However, it determined there are eight other banks of systemic importance based in the Grand Duchy, with Société Générale Bank & Trust being far the biggest, and assigned them according buffer rates.

To access the text of the regulation in French, click here.

Footnotes

1 Commission de Surveillance du Secteur Financier – the Luxembourg financial supervisory authority.

2 Undertakings for collective investment in transferable securities under Directive 2009/65/EC.

3 Alternative investment fund managers under Directive 2011/61/EU.

4 Directive 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing.

5 Regulation 2017/1131 on money market funds.

6 Law of 11 January 2018 on transparency requirements for issuers.

7 Luxembourg law of 10 November 2009 on payment services.

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27 Mar 2019, Business Breakfast, London, UK

Recently though, regulation has retreated. When regulation retreats beyond the tolerance of civil society, we see the law being used in different ways to hold businesses to account for their impacts. This risk is more opaque.

 
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