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Luxembourg Clarifies Rules for Non-EU Firms Providing Financial Services
In an effort to promote financial stability and consumer protection, the Commission de Surveillance du Secteur Financier (CSSF) has issued guidance on the rules governing non-European Union (EU) firms providing financial services in Luxembourg.
Authorisation Requirements for Non-EU Firms
Non-EU firms that wish to provide investment and ancillary services in Luxembourg must meet certain authorisation requirements. Specifically, they must demonstrate that their home country’s supervision and authorisation rules are deemed equivalent to those set out in the Banking Act. Additionally, the CSSF has established a list of countries whose supervisory authorities have signed Memoranda of Understanding (MoUs) or addendums with it, ensuring cooperation on regulatory matters.
Exemptions from Authorisation Requirements
The guidance clarifies that non-EU firms providing investment and ancillary services on a purely intra-group basis are exempt from authorisation requirements. Additionally, the reverse solicitation exemption applies if the firm does not actively solicit clients in Luxembourg.
Territoriality Aspects
Regarding territoriality aspects, the CSSF has specified that investment and ancillary services are deemed provided in Luxembourg when:
- The non-EU firm has an establishment (such as a branch) in the country
- It provides services to retail clients in Luxembourg
- It supplies services from a location in Luxembourg
Rules of General Good
Non-EU firms providing financial services in Luxembourg must also comply with certain rules of general good, including those related to:
- Consumer protection
- Anti-money laundering measures
The CSSF will review and adjust its authorisation requirements if a harmonised regime for cross-border banking services is introduced at the EU level, as proposed by the European Union.
Key Takeaways
• Non-EU firms providing investment and ancillary services in Luxembourg must meet authorisation requirements. • Authorisation exemptions apply for intra-group services or reverse solicitation. • Territoriality aspects are key considerations when determining whether services are provided in Luxembourg. • Non-EU firms must comply with rules of general good, including consumer protection and anti-money laundering measures.
The CSSF’s guidance aims to ensure a level playing field for financial institutions operating in Luxembourg, while also protecting consumers and maintaining financial stability.