On 5 August 2016, the Commission de Surveillance du Secteur Financier (CSSF) issued CSSF Circular 16/641 which updates CSSF Circular 15/629 "on supplementary supervision to be applied to financial conglomerates and definition of structure coefficients to be observed by the regulated entities belonging to these financial conglomerates pursuant to Article 56 of the law of 5 April 1993 on the financial sector". The Circular applies to credit institutions, investment firms, asset managers and alternative investment fund managers (AIFMs). This update reflects the amendment made by Directive 2011/89/EU to Directive 2002/87/EC "on the supplementary supervision of credit institutions, insurance undertakings and investment firms in a financial conglomerate".

CSSF Circular 16/641 adds the following paragraph to Section 2 on the "Supplementary supervision on capital adequacy", point a. "Technical method for the calculation of the supplementary requirements", point 1) (Method based on accounting consolidation): "When this method is applied, the supplementary capital adequacy requirements with regard to a financial conglomerate, the own funds and the solvency requirements of the entities in the group shall be calculated by applying the corresponding sectoral rules on the form and extent of consolidation as laid down in particular in Articles 18 of EU Regulation n. 575/2013 and 221 of Directive 2009/138/EC. The text of Circular 16/641 is available under the following web link.

The text of Circular 15/629 as amended by Circular 16/641 is available under the following web link.

Both texts are only available in their French version.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.