Luxembourg Takes Steps to Rein in Bank Secrecy Laws

Striking a Balance Between Confidentiality and Transparency

The Commission de Surveillance du Secteur Financier (CSSF), Luxembourg’s financial regulator, has introduced new measures aimed at increasing transparency and accountability in the country’s bank secrecy laws. As of September 2, 2019, revised guidelines have been put in place to balance confidentiality with transparency in financial transactions.

Key Changes to Bank Secrecy Laws

The CSSF has updated several guidelines with a revised FAQ on professional secrecy and its application in cases of data transfer by an entity acting as central administration or depositary bank to another service provider. The key changes include:

• Client Consent: UCIs, SICARs, and FCPs must obtain consent from clients before transferring personal and confidential data to a service provider.
• Type of Information: Clients must be informed about the type of information being transmitted and the country of establishment of the service provider.
• Investor Notification: The management body of UCIs or the management company of FCPs must inform investors about the transfer of their data, allowing them to object or provide consent.

Strengthening Financial Sector Regulations

The revised guidelines are part of Luxembourg’s ongoing efforts to strengthen its financial sector regulations and maintain its position as a major financial hub in Europe. By striking a balance between confidentiality and transparency, Luxembourg aims to create a more secure and trustworthy environment for financial transactions.