Supervision

European regulators, especially those in Paris and Luxembourg, are at odds over the regulatory and technical standards for the updated European Long Term Investment Funds scheme, known as Eltif 2.0, according to people familiar with the discussions.

The Luxembourg bar association ia applying a form of shock therapy to lawyers taking a laissez-faire view of anti-money laundering and terrorist financing laws, but its disciplinary body has nevertheless found a loophole allowing it to continue this country’s tradition of not publicly identifying the guilty.

The European Securities and Markets Authority, or Esma, on Thursday announced that from 2025, cyber risk and digital resilience in Europe’s securities sector will take precedence alongside ESG reporting in terms of overarching priorities for the supervisors in EU member states.

Luxembourg, a hub for global finance, has seen a significant uptick in alerts on questionable transactions that could signal money laundering or even finance terrorism.

The Luxembourg Ucits market, a cornerstone of the European investment landscape, demonstrated both its strength and vulnerability in the face of 2022’s economic turbulence, with fund managers navigating increased market and credit risks, while maintaining prudent leverage and liquidity management.

Financial supervisors across Europe are actively providing industry guidance on sustainability claims that financial firms attach to their products. EU-level guidance calls for communications with investors that is fair, clear and not misleading. In Luxembourg, CSSF has outlined its expectations of investment fund managers in a thematic review published in August.

Luxembourg’s financial supervisor CSSF is urging banks, investment funds and the general public in the Grand Duchy to be extra vigilant in relation to money transfers that could finance terrorist groups such as Hamas and Islamic Jihad. The reminder comes just a month after the world’s top body for fighting money laundering and terrorism finance said the sector’s understanding of terrorism finance is “very low”.

Though the EU consultation of the much-debated Sustainable Finance Disclosure Regulation is set to conclude only in December, the outlines of what will be termed as SFDR 2.0 are gradually emerging.

On 11 July 2023, the European Securities and Markets Authority (Esma) updated its guidance in relation to the definition of “advice”. This was rendered through a supervisory briefing which basically an update of the previous Q&As issued by CESR - Esma’s predecessor - on this topic.

The European Securities and Markets Authority (Esma), the EU’s financial markets regulator and supervisor, on Tuesday said it plans a comprehensive review next year of industry efforts to integrate sustainability in investment firms’ suitability assessment and product governance processes and procedures.

The review will be shaped as a Common Supervisory Action, or CSA, in which it closely involves national supervisors such as the CSSF in Luxembourg.