Laws and Regulations

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.

The number of complaints received about financial services in Luxembourg last year rose by 25 percent, with clients in Germany and the U.K. accounting for almost half of them, according to the latest CSSF annual report.

One month after the EU ordered the investment sector to ask clients for their sustainability preferences, investment firms appear to show limited enthusiasm for complying with the new requirements as complexity around the EU’s ESG rules persists and greenwashing fears linger.

Private consumers seeking to invest in virtual assets through investment funds, despite the massive losses incurred by investors in certain cryptocurrencies, should be aware they are doing so without the protection of financial regulatory oversight, Luxembourg financial regulator the CSSF said.

The CSSF document was titled “Notice to private consumers in the context of investment funds providing exposure to virtual assets”. 

A European screening exercise of prospectus approvals that involved Luxembourg’s financial supervisor CSSF has concluded that EU regulators need to be more efficient in their assessments and that more clarity needs to be provided on the use of  “additional criteria” that national supervisors apply.

A recent European Union agreement to crack down on the “wild west” in international crypto markets is “not a threat for the Luxembourg crypto market,” according to a senior official at international fund services firm Apex Group.

Representatives of the European Council and the EU parliament have reached a political agreement on the Markets in Crypto Assets proposal, known as MiCA, which covers issuers of unbacked crypto-assets, and so-called stablecoins, as well as the trading venues and the wallets where crypto-assets are held. 

Five representatives of the financial services sector in Luxembourg have been named as members of working groups and specialist advisory committees of the European Securities and Markets Authority, or Esma. The new composition of the committees was made public on Friday and includes about 200 names.

A new EU law from 2025 will require companies in Europe to accept a future in which their reporting data on sustainability and their ESG impact will be just as important as data on their financial performance. Non-EU companies also will be subject to these requirements. “The landscape is going to change because preparers are going to offer reliable data,” said Patrick de Cambourg, chair of the EU taskforce on sustainability reporting standards.

Europe’s asset management industry on Wednesday called on governments across Europe to take additional actions such as introducing new tax incentives to protect retail investors and savers against inflation. 

Luxembourg’s fund industry supports the introduction in new EU retail finance legislation of more lenient ‘opt-up’ criteria for retail clients that would give them the same status as professional clients. At the same time, it opposes the creation of a new category of semi-professional investors.