Laws and Regulations

It is over a year since the end of the transition period that saw Brexit come into full effect and as regards financial services regulation, the UK still appears to be searching for a new direction. Or maybe this is the plan. Could the strategy be to talk about change for a domestic political audience, while keeping real divergence to a minimum? 

The European Securities and Markets Authority (Esma), the EU’s securities markets regulator based in Paris, said on Tuesday that it continues to see high risks to institutional and retail investors of further, possibly significant, market corrections. 

The Chambre des Députés, Luxembourg’s parliament, on Wednesday approved a long-awaited modernisation of the Grand Duchy’s securitisation law that will enable fund managers to actively manage pooled debts such as corporate loans and mortgages.

Queen Máxima of the Netherlands has called on European financial supervisors to review financial services for their health impact and urged the banking, payments and investment industries to do more to make sure that their clients make well-informed decisions.

There has been scant divergence from EU financial sector rules in the two years since the UK left the EU. Nor are there many clear future policy proposals. Hence little has changed for Luxembourg players marketing into the UK. Could 2022 be the year when things start to shift?

Luxembourg companies from small to large are taking strides in the realm of virtual assets. This market is still under construction and regulatory and infrastructural elements are still pending. Several companies were represented at the recent Luxembourg For Finance Digital Capital Raising webinar, along with a representative of Luxembourg’s financial regulator CSSF.

Top-level European securities markets regulator ESMA (European Securities and Markets Authority) has announced it will be examining the valuation of UCITS and open-ended alternative investment funds (AIFs) across the EU.

The new corporate taxation rules from the Organisation for Economic Co-operation and Development (OECD) join earlier reforms that collectively pose economic and fiscal risks to the Luxembourg economy, according to the International Monetary Fund (IMF). Tax experts say it is possible that some non-financial multinationals located here might decide to leave because of the new OECD rules.

Unshell – the name given to the third anti tax-avoidance directive (ATAD III) – would have a “huge impact for Luxembourg, especially for Luxembourg” said Carlo Fassbinder, tax director at the Luxembourg finance ministry.

Luxembourg business representatives have said that the OECD’s Inclusive Framework Pillar One and Two corporate income tax proposals contain risks of excessive complexity, could put state tax authorities under pressure, increase the likelihood of litigation and could put competitiveness at risk.