Luxembourg has decided to raise charges for supervising financial institutions by approximately 10 to 15 percent this year, according to an analysis of the Grand Duchy’s recent government decision. The increase was roughly 15 percent for banks, while investment firms were informed of increases of around 10 percent for 2022.
Luxembourg’s financial regulator CSSF said the increase was necessary because it, like its counterparts in other EU countries, has been burdened with additional tasks as a result of new international and European regulations. This specifically concerns banks and new types of businesses in innovative payment systems. CSSF also said that its fees had not been changed for four consecutive years.
“The revised schedule of taxes is a combination of revised taxes and new taxes in connection with new tasks entrusted to the CSSF”, said the supervisor’s spokesman Paul Wilwertz in an emailed comment.
At the end of 2020, the CSSF employed 938 agents with an annual turnover of €123 million, compared to 638 people at the end of 2015, when it booked a turnover of €83 million, according to its annual reports.
Evolving framework most costly
The adjustment follows “the evolution of the legal framework,” said law firm Arendt in a note to clients. The new fees were officially announced by the government on 22 December in the Grand Duchy’s legislative journal.
Banks saw relatively large fee increases of approximately 15 percent as national financial supervisors across the EU have stepped up supervision of credit institutions. The most notable increase in Luxembourg is the fee for processing a request to CSSF to approve a new bank. This fee now is €50.000, compared to €15,000 as was endorsed by the Luxembourg government at the end of 2017, according to the regulation.
Lump sum payment
A large bank whose total balance sheet exceeds 2500 million euro from outside the European Economic Area active in Luxembourg now pays an annual lump sum of €407,500, up 16 percent from the earlier annual. A comparable institution with headquarters in an EEA country now faces €150,000 in supervision fees, up 15 percent.
Supervision fees for investment firms and pension funds have been increased by approximately 10 percent, according to the regulation, as have examination fees and the lump sum charges for the most common types of investment funds.
Arendt noted that a number of new fees have been introduced. These apply to financial holding companies, prudential supervision of investment firms and the supervision of new account information service providers, a new type of company that can provide online payment services.