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On 13 October 2023, the CSSF published Circular 23/841 on the application of the ESMA Guidelines on certain aspects of the MiFID II remuneration requirements (ESMA35-43-3565 – "Guidelines"). The Circular confirms that the CSSF has integrated the Guidelines into its administrative practice and regulatory approach with a view to promoting supervisory convergence in this field at European level.
The Circular applies to the following entities: investment firms and credit institutions and also to UCITS management companies and alternative investment fund managers ("IFMs") when providing services under their MiFID top-up licence.
There are ongoing discussions with the CSSF with respect to the practical application of the Guidelines to IFMs having a MiFID top-up licence. However, considering that the Guidelines mainly aim at avoiding conflicts of interest in the area of remuneration and ensuring compliance with conduct of business requirements, no fundamental impact on current remuneration practice is expected.
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