Supervision

Luxembourg needs to make a bigger effort to supervise the non-financial sector and better scrutinize real estate firms, trust companies, notaries and services firms, the world’s top body to fight money laundering and the financing of terrorism said on Wednesday. Both the Luxembourg government and financial sector supervisor CSSF issued statements underlining the FATF report’s “overall good result” for Luxembourg.

Luxembourg’s Commission de Surveillance du Secteur Financier (CSSF) announced on Monday that Marco Zwick’s mandate as the director in charge of supervising investment funds has been renewed for an additional five years, effective from September 1, 2023. Zwick has been serving in this role since 2018. CSSF meanwhile also said that a decision on the renewal of the mandate for its chief bank supervisor, Claude Wampach, was made in July per royal decree.

Urban Angehrn, CEO of the Swiss Financial Market Supervisory Authority (Finma), is stepping down at the end of September, citing health issues linked to job-related stress. Deputy Director Birgit Rutishauser will become the interim director starting Oct. 1, according to a statement from the agency.

Animated movies. German real estate. Trade finance. Polish mortgages. Industrial lasers. Environmental intelligence. Pharmaceutical services. More than 1.5 billion euro has been invested in the Luxembourg-domiciled alternative investment funds under the wings of Fuchs Asset Management. Its AIFM portfolio presents a small microcosm of alternative investments managed via the Grand Duchy. The manco is for sale after its parent company, Fuchs & Associes, entered liquidation last month. Jean-Jacques Lava, deputy-CEO at Fuchs AM, said the sale process is going according to plan.

La Commission de surveillance du secteur financier (CSSF) du Luxembourg a demandé à l’industrie des fonds d’investissement de procéder à un examen approfondi des évaluations des fonds d’investissement et de les améliorer si nécessaire. Cette mesure a été prise à la suite d’un échantillon européen qui a révélé des lacunes dans la manière dont les fonds d’investissement calculent la valeur de leurs actifs dans un certain nombre de pays de l’UE.

Unlike Luxembourg, financial supervisors in Belgium and the Netherlands see no need for a diligent review of fund valuation practices, spokespeople have told Investment Officer. In Ireland, meanwhile, the supervisor is preparing a “broader industry communication” on the valuation of funds that will be published in the coming months.

On December 22nd, 1972, investment funds in Luxembourg became subject to supervision for the first time. Initially, the rules provided investors with significant protection, but over time, they have only served to increase the fees they pay.

Delegation

Delegation is one area of the industry that has become so complex that it’s almost impossible to see the bigger picture. It’s a cornerstone that has facilitated the industry’s growth while also making it increasingly obscure.

Luxembourg’s financial watchdog, the Commission de Surveillance du Secteur Financier (CSSF), has set a deadline of Dec. 31, 2023, for investment funds and their managers to conduct comprehensive assessments of their valuation frameworks and to update these where necessary.

The European Insurance and Occupational Pensions Authority, known as Eiopa, on Monday published its Insurance Risk Dashboard for the first half of 2023. This assessment showed macroeconomic exposures as the most significant concerns at this time. 

Financial supervision in the European Union has encountered a pressing challenge - a notable disparity in the approaches taken by national financial supervisors when it comes to sanctioning investment funds. As the watchdog of the EU›s financial markets, the European Securities and Markets Authority (Esma) has identified this growing divide and is now pushing for measures to foster greater convergence among member states.