Luxembourg: Securitization & Structured Finance

The European Court of Justice's Advocate General has delivered a significant opinion on whether Luxembourg properly implemented the EU Anti-Tax Avoidance Directive when it classified securitisation entities as exempt financial undertakings. The case examines whether Luxembourg's approach to exclude these entities from interest limitation rules aligns with EU law and the principle of equal treatment, with potential implications for how member states interpret ATAD's financial undertaking exemptions.

A proposed bill of law seeks to modernize Luxembourg's securitization framework by expanding financing options beyond traditional instruments, introducing cross-compartment investment mechanisms, and extending active portfolio management capabilities to include equity positions. The reforms aim to enhance legal certainty around asset ring-fencing in insolvency scenarios while aligning the regime with contemporary market practices, particularly for Islamic finance structures and multi-compartment vehicles.

Advocate General Kokott has delivered her Opinion in Commission v Luxembourg (Case C-138/24), recommending that the Court of Justice of the European Union (CJEU)...

Securitisation Comparative Guide for the jurisdiction of Luxembourg, check out our comparative guides section to compare across multiple countries

On 12 July 2024, the Luxembourg Parliament adopted the draft bill No. 8185 (the NPL Law) transposing Directive (EU) 2021/2167 regarding credit servicers and credit purchasers entered into force on 28 December.

The Commission Delegated Regulation, supplementing Regulation (EU) 2017/2402 (the "Securitisation Regulation"), entered into force on 8 July 2024 (the "Commission Delegated Regulation").

Luxembourg is enhancing its appeal as a destination for securitisation transactions by amending its highly successful 2004 Securitisation Law. Head of Capital Markets - Luxembourg, Sandra Bur summarises 10 of the key changes.

The law dated 22 March 2004 on securitisation has created a very successful and reliable framework for enabling a large panel of securitisation, financing, and repackaging transactions.

draft Bill of law No. 7825 (the "Bill") amending the Law of 22 March 2004 on securitisation (the "Securitisation Law") and certain other laws was submitted to the Luxembourg Parliament on 21 May 2021...