Laws and Regulations

To preserve financial stability , EU supervisory agencies for energy markets and for financial markets on Tuesday said they will intensify their cooperation and improve their exchange of information, seeking to avoid potential market abuse in Europe’s energy and derivatives markets.

The European Securities and Markets Authority on Monday said it sees a need to create a common supervisory culture in the EU and believes that national financial supervisors need to intensify their horizontal, cross-border cooperation. It also acknowledged that it needs to improve its own cooperation with national supervisory bodies.

As fund managers and investors across the 27 countries in the European Union continue to question the union’s approach to its sustainable finance framework, Brussels has made clear it will take its time before addressing growing confusion over greenwashing. “Greenwashing remains to be defined at the EU level.”

We’re finishing a productive week at Investment Officer Luxembourg in terms of news stories, with surprisingly strong and growing interest from international readers.

Financial regulators across Europe are keeping a close eye on their Luxembourg counterpart CSSF, which is reviewing its rules that tell investment firms how to handle errors in calculations of Net Asset Values, or NAVs. “I think that we may consider the CSSF approach as a best practice.”

Following 1.55 million euro in regulatory fines, Luxembourg investment firm Fuchs & Associés Finance SA is stepping up efforts to address internal compliance problems, adding additional directors and compliance staff to bring its governance back in line with legal requirements.

Luxembourg’s financial regulator CSSF has found shortcomings in the application of measures to fight money laundering and terrorism finance at fund services provider Maitland Luxembourg SA and issued a fine of 266,000 euro. 

Belgian police authorities have launched a criminal investigation in Antwerp-based stockbroker Merit Capital, a Belgian press report said on Thursday. The probe is linked to its transactions with H2O Asset Management.

Merit Capital’s future is up in the air after several attempts to find a buyer failed. Luxembourg’s Fuchs & Associés was forced to step back as a possible buyer last month. 

The European Union, under its taxonomy, requires SRI funds to declare what part of their portfolio is green by 1 January 2023, but there is still much work to be done to address the pitfalls in the EU’s sustainable finance framework, Triodos Investment Management’s Hadewych Kuiper and Nikkie Pelzer (photo) said in an interview. “Some asset managers prefer to classify their sustainable funds under Article 6” because it requires less reporting, making it cheaper.

Luxembourg’s financial regulator CSSF imposed a total of 4.3 million euro in fines on financial services companies in the Grand Duchy last year, less than the 6 million euro in fines issued in 2020. Most fines were imposed under laws preventing money-laundering and terrorism finance, according to CSSF’s 2021 annual report.