Fri, Oct 22, 2021

AMF and CSSF Regulatory Update - Third Quarter 2021

The Financial Services Compliance and Regulation practice of Kroll, provides updates from the French financial regulator, Autorité des marchés financiers (AMF) and Luxembourg’s Commission de Surveillance du Secteur Financier (CSSF) for asset managers during Q3 2021.

AMF Articles / News

The AMF Enforcement Committee Fines an Asset Management Company Specializing in Real Estate for Breaches of Its Professional Obligations

July, 2

The AMF Enforcement Committee has imposed a fine of 250,000 euros against the management company called Perial Asset Management, which specializes in real estate.

The Committee identified four breaches:

  • The management company's property valuation procedure was found to be incomplete and not fully operational
  • Some promotional documents distributed by the management company (commercial brochure, promotional videos and communications on social networks) contain unclear, inaccurate or misleading information
  • Failure in the management of the conflicts of interest
  • Breaches related to anti-money laundering and counter-financing of terrorism (AML-CFT). In particular, the internal procedures and the second level controls

Read the full article here.

The AMF Has Published Its Market and Risk Outlook

July, 5

The AMF has published a document summarizing the evolution of market trends and risks in 2020, which was marked by the consequences of the health crisis.

The document covers the financing of the economy, the organization of markets and intermediaries, asset management and household savings.

The outlook highlights the following trends:

  • Levels of financial stability risks, including rising risk premia, credit risk and lack of international policy coordination were very high in 2020. The AMF believes that these risk levels will remain high in 2021 and 2022
  • Risk levels of volatility in liquidity conditions were significant in 2020. The AMF believes that this level of risk will remain high in 2021 and 2022
  • The level of risk around the functioning of market and post-trade infrastructures was significant in 2020. The AMF believes that this level of risk will increase in 2021, in particular because of the increase in operational incidents
  • The profitability risk for financial institutions in 2020 was high due to the increase in non-performing loans and interest rate risks
  • The risk of companies having difficulty accessing financing in 2020 was high. The AMF believes that this level of risk will remain high in 2021 and 2022
  • The risk of a lack of protection for investors in the event of misinformation about the risks associated with certain investments or distribution channels was significant in 2020

Evaluation of the SAPIN 2 Law

July, 7

The Law Committee has appointed two members of the National Assembly to conduct a review of Sapin-II anti-corruption law. The purpose of the review is to establish an in-depth assessment of the main contributions of the law and to suggest solutions to improve it.

The review found that the measures in place have made it possible to protect French companies against the extraterritorial strategies of other countries, to effectively punish acts of corruption and to develop a culture of prevention against breaches of probity within companies.

The report formulates fifty proposals to improve anti-corruption policy and address the weaknesses noted.

The AMF Highlights the Importance of Independent Financial Analysis

July, 09

The President of the Société Française des Analystes Financiers has (SFAF) addressed a letter to the Chairman of the AMF to inform him of a warning received from the lawyers of a listed company against the consequences of public dissemination of comments likely to damage the reputation of the company in question and its managers.

In response to this letter, the Chairman of the AMF recalled the fundamental importance of an independent financial analysis, carried out in conditions that guarantee professionals the free exercise of their activity and considered the warnings, intimidation and threats made against financial analysts to be totally unacceptable.

The AMF Enforcement Committee Sanctions Two Individuals for Insider Trading

July, 09

The AMF’s Enforcement Committee has imposed a fine of 500,000 euros on Mr. Remy Pierre for having illegally disclosed to Mr. Solère material non-public information about an increase in revenues and an upward revision of the EBITDA margin forecasts of a listed company. The committee also imposed a fine of 1,000,000 euros on Mr. Stéphane Solère for using the inside information for acquiring or selling, for his own account and for the account of third parties, securities of the company in question.

Read the full article here.

ESMA Launches a Public Consultation on EMIR Reporting Guidelines

July, 13

ESMA has launched a public consultation on draft guidelines for derivatives reporting under EMIR and in particular on the following issues:

  • How reporting should be constructed and under what circumstances it should be prepared
  • The reporting logic, including the use of action and event types
  • The allocation of responsibilities and delegation of reporting
  • The correct population of fields for different reporting scenarios and different products

The draft guidelines also clarify important aspects of the procedures to be implemented by reporting entities to improve data quality as well as some operational aspects regarding data access.

The deadline for responses is September 30 2021. ESMA will review the responses to this consultation with a view to finalizing the proposed guidelines and will publish a final report in Q4 2021/Q1 2022

Implementation of RTS Disclosure Postponed

July, 13

The European Commission has announced to the European Parliament the postponement by six months of the deadline initially set for the adoption of the draft RTS related to Disclosure Regulation. The Commission plans to consolidate the 13 regulatory technical standards into a single delegated act.

The Commission has announced that it will not be able to meet the initial deadline due to the length and technical details of the draft RTS standards.

Read the full article here.

ESMA Publishes Its Report on UCITS Penalties

July, 20

ESMA published its fourth report on penalties and measures imposed under the UCITS Directive in 2020.

According to this report, the number of national competent authorities that issued penalties and/or measures in 2020 is 17. The number has slightly increased compared to 2019. A total of 100 sanctions were issued in 2020, for a total amount of 1.1M euros showing a downward trend in the number of penalties issued since 2018.

European Commission Overhauls Anti-Money Laundering and Countering the Financing of Terrorism Rules

July, 20

The Commission has presented a package of legislative proposals to strengthen EU anti-money laundering and anti-terrorist financing (AML/CFT) rules.

The package consists of four legislative proposals:

  • A regulation establishing a new EU AML/CFT authority
  • An AML/CFT Regulation, containing directly applicable rules, including on customer due diligence and beneficial ownership
  • A sixth AML/CFT Directive "AMLD 6", replacing the currently applicable Directive 2015/849/EU and containing provisions that will be transposed into national law, such as rules on national supervisory authorities and financial intelligence units in member states
  • A revision of the 2015 regulation on funds transfers to ensure traceability of crypto asset transfers (Regulation 2015/847/EU)

The legislative package will be discussed by the European Parliament and the Council. The future Anti-Money Laundering Authority is expected to be operational in 2024 and will start its direct supervision work a slightly later. 

Read the full article here.

ESMA Publishes its Report on AIFM PenaltiesJuly, 20

ESMA published its second report on AIFM penalties and measures imposed in 2020.

According to the report, 17 national competent authorities imposed a total of 131 penalties and/or measures compared to 87 imposed in 2019. The total amount of financial sanctions decreased to €3.3m from €9m in 2019. 

13 national authorities did not issue any sanctions in 2020.

ESMA Highlights Areas for Improvement in Line with MiFID II Adequacy Requirements

July, 21

On July 21 ESMA published the results of the 2020 Common Supervisory Action (CSA) on MiFID II suitability requirements.

These results highlight shortcomings and areas for improvement concerning certain requirements introduced by MiFID II, including, among others, the requirement to consider the cost and complexity of equivalent products, the costs and benefits of switching investments and suitability reports.

Based on its findings, ESMA will, in 2021/2022, update and supplement its guidelines to address areas where a lack of convergence has emerged and/or to further clarify certain MiFID II requirements.

The European Commission Has Published a Series of Q&A on SFDR

July, 26

In January 2021, the European Supervisory Authorities addressed a letter to the European Commission requesting clarification on certain aspects of Regulation (EU) 2019/2088 (“SFDR”).
The European Commission published a series of Q&A on July 26, 2021 to provide clarification on priority issues. Notably:

  • The application of the SFDR to registered AIFs / Sub-threshold
  • Application of the SFDR to non-EU AIFs
  • The average number of 500 employees threshold for principal adverse impact reporting ("PAI")
  • The criteria for a classification under Article 8 and a definition of "promotion"
  • Criteria for classification under Article 9
  • Application of the SFDR to segregated mandates and dedicated structures

IOSCO Consults on ESG Data Providers

The International Organization of Securities Commissions has opened a consultation on the regulation of ESG rating agencies and data providers.

This consultation follows a report by IOSCO that revealed several risks and issues in the sector, including a lack of transparency in the ESG rating methodologies and the existence of potential conflicts of interest leading to a lack of confidence in ESG ratings or in the relevance of ratings and data.

The ultimate objective of this consultation is to increase the reliability and comparability of these ratings.

The consultation covers the following aspects:

  • The use of ESG data and ratings
  • The sources of the data
  • The independence of stakeholders (conflicts of interest and political and economic pressures)
  • The independence and objectivity of ESG ratings
  • Transparency
  • Confidentiality of non-public information
  • Due diligence
  • The information gathering process
  • Issues raised by stakeholders
  • The process of transparency of sustainability information.

The AMF Complies with ESMA Guidelines on Updating Stress Test Scenarios for Money Market Funds

July, 29

The AMF has updated its position DOC-2018-05 to reference ESMA’s guidelines on updating stress test scenarios in accordance with Article 28 of the Money Market Fund Regulation.

To reflect the tensions that have arisen in the money market since the beginning of the health crisis, the stress test parameters have been scaled upwards for the most part.

The guidelines apply from August 29, 2021. As MMF reporting is communicated on a quarterly basis for MMF with more than 100 million euros of assets under management, MMF managers will consequently use the updated stress scenario parameters from September 30, 2021.

Transposition of the Directive on Cross-Border Distribution of Collective Investment Undertakings

August, 02

The AMF has amended its General Regulation and updated three doctrine documents (AMF instructions DOC-2011-19 and DOC-2014-03 and AMF position DOC-2014-04) in order to transpose into French law directive (EU) 2019/1160 of 20 June 2019 on the cross-border distribution of collective investment schemes ("CBDF Directive")

The amendments to the AMF's General Regulation and doctrine concern the requirements applicable to French UCITS with respect to investors in the host states where they undertake marketing activities, as well as those applicable to foreign UCITS and AIF managers with respect to investors in France regarding the processing of subscription, repurchase and redemption orders from investors.

In addition, the amendments to the AMF General Regulation and to Position DOC-2014-04 supplement the existing provisions on the information that a French portfolio management company must provide to the AMF when it performs pre-marketing of an AIF in France or in another member state. A standard pre-marketing form has been created.

Read the full article here.

The AMF Enforcement Committee Fines Two Amundi Group Companies, A Brokerage Firm and Three Former Employees of These Companies for Price Manipulation and Breaches of Several Professional Obligations

The AMF Enforcement Committee has imposed a fine of €25,000,000 on Amundi Asset Management and a fine of €700,000 on Amundi Intermediation for the following reasons:

  • The manipulation of the Euro Stoxx 50 Futures (FESX) prices (wash trades)
  • Deficiencies in the market abuse detection system in place
  • The absence of declaration to the AMF of potential price manipulations on FESX
  • Deficiencies in the recording and pre-allocation of orders
  • Deficiencies in the management of conflicts of interest and non-compliance with the obligations to act honestly, fairly and professionally, in the best interests of investors or clients
  • The insufficiency of the system for detecting risks of non-compliance
  • Misusing information relating to pending orders on behalf of certain funds, with a view to generating profits on behalf of other funds (front running)

Mr. Ludovic Delion, portfolio manager within the insurance division of Amundi AM has been banned from exercising the function of collective and individual management for a period of 10 years.

Mr. Gregory Saey, trader at Amundi Intermediation, was also banned from providing the services of third-party and own-account order reception and transmission for a period of ten years.

The commission also imposed a €5,000,000 fine on Tullett Prebon Europe Limited, a London-based brokerage firm, for executing orders transmitted by Amundi Intermediation and a €20,000 fine on Thomas Vignon, head of derivatives at Tullett Prebon's Paris branch.

Read the full article here.

The AMF Updates Its Policy on the Pre-Approval of Changes to UCITS and AIFs During Their Lifetime

August, 6

The AMF has updated its instructions DOC-2011-19, DOC-2011-20, DOC-2011-21, DOC-2011-22 and DOC-2011-23 relating to authorized UCITS and AIFs to clarify several rules on the approval of changes made during the life on the funds.

A new rule has been introduced to determine whether or not AMF approval is required. Two parameters are now taken into account: changes in the synthetic risk indicator (SRRI) and changes in exposure to one or more types of risk. According to this new rule, a change is subject to the approval of the AMF in the following three situations:

  • When the synthetic risk indicator changes by two or more boxes
  • When the change in exposure to one or more risk types is greater than or equal to 120% (in absolute value)
  • When the synthetic risk indicator changes by only one box and the change in exposure to one or more risk types is between 80% and 120% (in absolute value)

The AMF has also clarified the situations in which the easing of the subscription requirements for authorized collective investments schemes is considered a change requiring pre-approval by the AMF.

Authorized collective investment management companies will have to comply with the provisions of the new instructions for requests received on or after September 1, 2021.

Read the full article here.

Publication of the Climat et Resilience Law

August, 24

The “Climat et Resilience” law on the fight against climate change and strengthening resilience to its effects was officially promulgated on August 24, 2021. The law includes 305 articles covering different aspects of daily life, notably:

  • Consumption
  • Production and working
  • Transportation
  • Housing
  • Nourishment
  • Strengthening legal protection of the environment
  • Provisions for climate and environmental assessment

The Ministry of Ecological Transition has also published a timetable for the implementation of these measures.

The Joint Committee of the European Supervisory Authorities Publishes Its Risks and Vulnerabilities in The EU Financial System Report

September, 8

The Joint Committee of the European Supervisory Authorities (EBA, EIOPA and ESMA) has published its second joint risk assessment report for 2021.

The report highlights the growing vulnerabilities in the financial sector resulting from measures taken to manage the health crisis, such as the increase in debt levels and the upward pressure on asset prices, expectations of inflation- and yield growth, as well as increased risk-taking by investors. Consequently, the Joint Committee established that financial institutions and supervisory authorities should continue to prepare for a possible deterioration in the quality of assets in the financial sector, despite the improvement in the economic outlook.

In addition, the report points out the increased exposure of the financial sector to cyberthreats and indicates that financial institutions will have to quickly adapt their technical infrastructure in response to new methods developed by cybercriminals to exploit vulnerabilities.

Finally, it invites the competent national authorities, financial institutions, and market participants to monitor the impacts of the disorderly increases in returns and the reversals of risk premia on financial institutions and investors, taking the example of GameStop, Archegos and Greensill observed in 2021.

Opening of the Test Platform for The Questionnaire on Investment Rule Violations and Compensation by Asset Management Companies

September, 13

In June 2021, the AMF announced that it had implemented new reportings on investment rule violations and compensation to strengthen its risk-based supervision approach and enhance its information gathering system. The first report is expected on October 31, 2021 for data relating to the third quarter.

Three methods of declaration are possible:

  • Declaring the violations of investment rule and customer compensation directly using the questionnaire provided in the platform
  • Importing a file that lists all of investment rule violations and customer compensation for a given quarter
  • Importing the Excel file provided, which will be sent directly to the AMF without completing the questionnaire

In order to allow the asset management companies to take note of the new questionnaire and to validate, if necessary, the Excel import file, before sending the first report, the AMF has set up a testing platform accessible via the following link here.

The AMF Informs Issuers About the Gradual Entry into Application of Article 8 Taxonomy Reporting Obligations

September, 22

On September 22, 2021, the AMF published a summary of the main provisions of Article 8 of the Taxonomy Regulation (EU Regulation 2020/852) and a reminder on the application schedule.

In accordance with this article, companies will have to publish sustainability indicators from January 1, 2022. A delegated regulation published by the European Commission on July 6, 2021 determines the content, the methods of calculation and the presentation of these indicators. The regulation is subject to a non-objection period by the European Parliament or the Council for a period of 4 months.

The reporting obligations provided for in the Delegated Regulation is implemented in several stages:

As of January 1, 2022, companies will have to publish lighter reporting. As of January 1, 2023, non-financial undertakings will have to publish a full report. However, lighter reporting will be maintained for financial undertakings. As of January 1, 2024, all companies will have to publish full reportings.

Given the application schedule and the complexity of the information to be published, the AMF invites the concerned issuers to prepare for the gradual entry into application of these texts and to refer in particular to the tool developed by the European Commission, "the EU Taxonomy Compass,” in order to verify the criteria to be met by each activity for it to be considered Article 8 aligned.

The AMF also encourages companies to begin their discussions on this subject and to involve all the departments concerned, their governance bodies and their auditors.

The AMF Updates Its Investigation and Control Charters

September, 27

The AMF has published a new version of its investigation and control charters to take into account the format of SPOT controls and the dematerialization of exchanges. These charters are given to the persons called upon during an investigation or an inspection initiated by the AMF.

The main changes made include using a wider range of means for transmission of summons to hearings, the accentuation of dematerialized exchanges and the inclusion of all the existing control formats, in particular, SPOT controls.

In addition, the new charters indicate that the electronic messaging media collected during an investigation or control will be destroyed and no longer returned to the person interviewed.

CSSF Articles / News

The CSSF Modifies Its List of High-Risk Jurisdictions Following FATF Statements

July, 5

On July 5 2021, the CSSF published the Circular CSSF 21/775 on the FATF statements, repealing Circular CSSF 21/767 of  March 3, 2021. The purpose of the circular is to inform the entities supervised by the CSSF of the FATF statements concerning high risk jurisdictions on which enhanced due diligence and, where appropriate, counter measures are imposed, as well as jurisdictions under increased monitoring of the FATF.

Compared to the March 2021 the FATF added Haiti, Malta, Philippines and South Sudan in the list of jurisdictions currently having strategic AML/CFT deficiencies for which they have developed an action plan with the FATF to address these deficiencies. In addition, FATF removed Ghana from said list. 
As of today, the 22 jurisdictions, having strategic AML/CFT deficiencies for which they have developed an action plan with the FATF to address these deficiencies, are Albania, Barbados, Botswana, Burkina Faso, Cambodia, Cayman Islands, Haiti, Jamaica, Malta, Mauritius, Morocco, Myanmar, Nicaragua, Pakistan, Panama, Philippines, Senegal, South Sudan, Syria, Uganda, Yemen and Zimbabwe.

Jurisdictions under increased monitoring are actively working with the FATF to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing.

When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring. This list is often externally referred to as the ‘grey list.’

The CSSF implements ESMA guidelines on outsourcing to cloud service providers

July, 12

On July 12,  2021, the CSSF published Circular CSSF 21/777 on ESMA Guidelines on outsourcing to cloud service providers.

The purpose of the Circular is:

  • The application in the Luxembourg framework of the ESMA guidelines on outsourcing to cloud service providers and,
  • The amendment of the scope of the Circular 17/654.

Compared to Circular 17/654, the new entities entering in the scope of the Circular 21/77 are:

  • Alternative investment fund managers (AIFMs) within the meaning of point (b) of Article 4(1) of the AIFMD
  • Depositaries of alternative investment funds (AIFs) referred to in Article 21(3) of the AIFMD
  • UCITS, management companies of UCITS within the meaning of point (b) of Article 2(1) of the UCITS Directive
  • Depositaries of UCITS within the meaning of point (a) of Article 2(1) of the UCITS Directive;
  • Investment companies that have not designated a management company authorised in accordance with the UCITS Directive
  • Central counterparties (CCPs) within the meaning of Article 2(1) of EMIR
  • Data reporting services providers within the meaning of point (63) of Article 4(1) of MiFID II and market operators operating a trading venue within the meaning of point (24) of Article 4(1) of MiFID II
  • Central securities depositories within the meaning of point (1) of Article 2(1) of the CSDR;
  • Administrators of critical benchmarks within the meaning of point (25) of Article 3(1) of the Benchmark Regulation

New entities in scope should review and amend by 31 December 2022 their existing cloud outsourcing arrangements by taking into account the requirements of Circular CSSF 17/654.

The Circular 21/777 applies as from July 31, 2021.

The CSSF Ends COVID-19 Weekly Questionnaire Relating to Investment Fund Managers

July, 16

On July 16, 2021, the CSSF published a press release to confirm that the weekly questionnaire submitted by investment fund managers will end on July 30, 2021. In April 2020, the CSSF launched the weekly questionnaire with the aim to cover financial data (total net assets, subscriptions and redemptions) and information on governance arrangement. In view of the evolution of financial markets, the CSSF decided to end the reporting at the end of July 2021. Therefore, the last questionnaire to be submitted to the CSSF covers the reference week from July 26 to July 30, 2021.

The CSSF Transposes CBDF Directive Regarding Cross-Border Distribution of UCITS and AIFs

July, 26

On July 26, 2021, the law of July 21, 2021 implementing the Directive 2019/1160 regarding the cross-border distribution of collective investment undertakings (the “CBDF Directive”) was published in the Luxembourg Official Journal (the “Memorial”). 

The law of July 21, 2021, which will enter into force on August 2, 2021, amends the law of December 17, 2010 on undertakings for collective investment, as amended (the UCI law), and the law of July 12, 2013 on alternative investment fund managers, as amended (the AIFM law).

The new law implementing the CBDF Directive will bring among others:

  • The introduction of the pre-marketing activities for Alternative Investment Funds (chapter 5bis of the AIFM law)
  • The rules for the discontinuation of marketing (articles 54-1 and 60-1 of the UCI law and articles 29-1 30-1 and 31-1 of the AIFM law)
  • The non-obligation to appoint a local agent for the marketing of shares/units (articles 53 and 59 of the UCI Law and article 46-1 of the AIFM law)

The CSSF Publishes Guidelines Regarding the Marketing Of Luxembourg and EU UCITS In Accordance With Directive (EU) 2019/1160

July, 28

Following the implementation of the Directive 2019/1160 regarding the cross-border distribution of collective investment undertakings, the CSSF published on 28 July 2021 the Circular CSSF 21/778 relating to the marketing of Luxembourg and EU UCITS. 

Compared to the Circular CSSF 11/509, the new Circular:

  • Discloses wording on the denotification process for Luxembourg-based UCITS registered for marketing in other member states
  • Amends the links where the information about the legal, regulatory and administrative provisions applicable to the marketing of UCITS in Luxembourg are available on the website of the CSSF

The CSSF Modifies Authorization Processes For New UCI and New Sub-Funds Added to Existing Fund Structures

July, 30

On July 30 2021, the CSSF published a press release on the authorization processes of new investment funds and new sub-funds added to existing fund structures. To optimize the current authorization process, the CSSF adopts the below changes:

  • Introduction of a new questionnaire “Fund Pre-Inception Readiness Review.” The document intends to provide a confirmation by the Investment Fund Manager ("IFM”) that all preparatory work and assessments required by regulation have been completed and that the IFM is ready to onboard the new fund or sub-fund(s) after authorization. The questionnaire needs to be submitted with the application file.
  • The CSSF will no longer request nor assess all agreements concluded between a fund and its service providers during the examination of an application file. At the end of the examination, the applicant will submit to the CSSF a copy of final signed agreements deemed core, along with a standardized letter confirming compliance of these agreements with applicable legal and regulatory requirements. The CSSF informs applicants on general guidance that is expected to be considered as good practice when drafting fund service contracts.
  • Two additional new guiding notes have been published on the CSSF website in order to give general considerations to be followed when submitting documents and to provide an overview table of all the documents required when submitting a UCI approval file.

The changes apply as from August 16, 2021.

The CSSF Adopts ESMA Guidelines Relating to MiFID II Compliance Function Requirements

July, 30

On July 30, 2021, the CSSF published Circular CSSF 21/779 on ESMA Guidelines on certain aspects of the MiFID II compliance function requirements. The Circular intends to enhance clarity and foster convergence in the implementation of certain aspects of the new MiFID2 compliance function requirements, repealing the 2012 ESMA guidelines on the same topic.

The Circular applies to the following companies:

  • Investment firms when carrying out investment services or investment activities or when selling or advising clients in relation to structured deposits
  • Credit institutions when carrying out investment services or investment activities or when selling or advising clients in relation to structured deposits
  • UCITS management companies when providing under Articles 101(3) and 101(4) of the law of 17 December 2010 (discretionary portfolio management, investment advice, safekeeping and administration of UCIs’ units)
  • AIFMs when providing services under Articles 5(4) and 5(6) of the law of July 12, 2013 (discretionary portfolio management, investment advice, safekeeping and administration of UCIs’ units, reception and transmission of orders)

The Circular complements Circulars CSSF 12/552 and 20/758 on central administration, internal governance and risk management and Circular 18/698.

The Circular shall apply with immediate effect.

The CSSF Confirms Entry into Force of New IFD Package Provisions Applicable to Investment Firms

September, 2

On September 2, 2021, the CSSF published a press release confirming the entry into force of new regulatory provisions applicable to investment firms as per the Investment Firm Directive and Regulation (IFD) package. 

The IFD package was implemented in Luxembourg by the law of July 21, 2021 amending the law of April 5, 1993 on the financial sector and introduced among others:

  • The classification of investment firms into three different classes a permanent minimum capital requirements between EUR 75,000 and EUR 750,000, based on the investment service or activity provided by the firm
  • Liquidity requirements (mandatory for “class 2” investment firms and optional for “class 3”)
  • An IFR reporting for which "class 2" investment firms will report on a quarterly basis as from September 30, 2021 and for which "class 3" investment firm will report on an annual basis as from December 31, 2021
  • Specific requirements regarding the remuneration policy for “class 2” investment firms.

The new IFR reporting must be submitted to the CSSF via eDesk module.

The CSSF Adopts Revised EBA Guidelines on Money Laundering and Terrorist Financing Risk Factors

September, 24

On September 24, 2021, the CSSF published Circular CSSF 21/782 on revised EBA guidelines on ML/TF risk factors. The purpose of the revised EBA guidelines is to provide guidance on the ML/TF factors such as the identification of the beneficial owner or enhanced due diligence related to high-risk countries while performing a customer due diligence.

Furthermore, the revised guidelines add new sectorial guidelines for crowdfunding platforms, providers of currency exchange services, corporate finance firms, payment initiation and account information services providers ("PISPs" and "AISPs").

The Circular applies as of October 26, 2021 and to both existing and future business relationships.

The CSSF Publishes Circular Regarding the Application of ESMA Guidelines on the MiFID II/MiFIR Obligations on Market Data

September, 30

On September 30, 2021, the CSSF published Circular CSSF 21/783 on ESMA guidelines on the MiFID II/MiFIR obligations on market data. The purpose of the Circular is the application in the Luxembourg framework of the market data requirements for the purpose of the pre-trade and post-trade transparency regime.

All regulated markets, market operators, credit institutions, investment firms and market operators operating a Multilateral Trading Facility (MTF) or an Organized Trading Facility (OTF), Approved Publication Arrangements (APAs) and Systematic Internalisers (SIs) must comply with the provision set out in the Guidelines which will apply as from 1 January 2022.

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