CSSF

Financial supervisors in Luxembourg and elsewhere in Europe on Monday stepped up their efforts to maintain financial stability, protect investors and ensure the orderly functioning of markets as part of the European Union’s overall response to the “tragic consequences” of Russia’s military aggression.

The future of some 855 funds with exposure to Russia is shrouded in uncertainty as the turmoil in Russia’s financial markets continued on Monday. JP Morgan AM and Prosperity on Monday suspended their funds with assets in Russia. East Capital warned of “a very high level of disruption”. Asset managers are facing requests for information from their regulators.

For a second time in two years, investment fund managers have been ordered to directly report significant redemptions as the CSSF, the Grand Duchy’s financial supervisor, stepped up its monitoring of the impact from the war in Ukraine and the international sanctions against Russia.

Luxembourg has a promising potential to further build on its global hub status for investment funds by encouraging management companies to expand their businesses into international fund distribution, according to Xavier Parain, CEO of FundRock, Luxembourg’s largest third-party manager of investment funds.

There’s a strong level of interest in crypto finance in Luxembourg’s financial centre, according to a survey carried out by the Luxembourg House of Financial Technology and PwC. The Grand Duchy nevertheless has yet to develop the necessary infrastructure to be a leading crypto finance centre.

The survey, entitled “Crypto-assets: Paradigm shift or short-term trend?” was carried out in the last quarter of 2021 and was presented on Wednesday at a Luxembourg event hosted by PwC.

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.

The Grand Duchy of Luxembourg was home to a record EUR5.86 trillion in global financial assets at the end of last year, according to new data released on Friday by the country’s financial supervisor CSSF. That is up 17.8 percent from the end of the previous year.

It may be only 8 years away, but many representatives of Luxembourg’s financial centre have clear visions of a 2030 of higher technology but also a commitment to ESG values, but which may be a challenge to bring about.

Integrating distributed ledger technology (DLT) can be “a real challenge” for financial institutions and regulators, Luxembourg’s financial regulator the CSSF (Commission de Surveillance du Secteur Financier) said last Friday in a white paper on distributed ledger technology (DLT), also known as blockchain (a type of DLT, the CSSF noted). 

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.