New CSSF Circulars applicable as from 01/01/2021 exclusively to Luxembourg investment firms
14 December 2020
CSSF Circular 20/758 on the central administration, internal governance and risk management of investment firms.
This Circular integrates the latest orientations of the European Banking Authority (“EBA”) and the European Securities and Markets Authority (“ESMA”).
The terminology and definitions of the Circular have been reviewed and clarified.
The main changes compared to CSSF Circular 12/552 concern :
Prudential procedure for the appointment of directors, authorised directors and key functions holders in investment firms
The investment firm now has its own prudential procedure for the appointment of directors, authorised directors and key functions holders and largely based on the existing amended procedure applicable to credit institutions.
The requirements of the procedure derive both from the new CSSF Circular 20/758, the guidelines of the European Banking Authority (EBA/GL/2017/12), the European Directive CRD IV (2013/36/EU), the European Directive MIFID II (2014/65/EU) as well as the LSF.
In addition, non-exhaustively, particular emphasis is placed on (I) the reinforcement of the investment firm ‘s responsibility for the initial and ongoing assessment of the persons concerned, (II) the solid analysis of the potential conflicts of interest due to an appointment and their resolution taken by the authorized directors and board of directors as well as (III) the commitment of the CSSF to communicate the authorisation decisions within three months of the receipt of the file deemed complete by the CSSF.
Anne ROSIER, OF COUNCEL, firstname.lastname@example.org