Financial Crime World

Luxembourg Compliance Checklist for Financial Institutions: What You Need to Know

The Commission de Surveillance du Secteur Financier (CSSF) has issued three circulars aimed at regulating Investment Fund Managers (IFMs) and Investment Funds in Luxembourg. These circulars introduce new requirements for Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF), Self-Assessment Questionnaire (SAQ), and regulatory reporting.

Circular CSSF 21/788: AML/CFT External Report

Effective: December 31, 2021 Applies to: All Luxembourg investment fund managers and Luxembourg investment funds that have not appointed an IFM supervised by the CSSF for AML/CFT purposes

  • The annual AML survey sent by the CSSF must be supplemented by an AML/CFT external report prepared by a Réviseur d’Entreprises Agréé (REA).

Circulars CSSF 21/789 and 21/790: SAQ, SR, and Management Letter

Effective: December 31, 2021 for IFMs, June 30, 2022 for investment funds Applies to: Investment Fund Managers (IFMs) and Investment Funds supervised by the CSSF

  • Annual Self-Assessment Questionnaire (SAQ) must be completed annually by IFMs.
  • Selected answers from the SAQ will be subject to testing by the REA in a Separate Report (SR).
  • Management Letter must be prepared by the REA.

Circular CSSF 21/790: LFR, SAQ/SR, and Management Letter

Effective: June 30, 2022 for Part I and Part II Funds of the 2010 Law, SIF, and SICAR Applies to: Part I and Part II Funds of the 2010 Law, SIF, and SICAR

  • Annual Long-Form Report (LFR) replaced by SAQ/SR and Management Letter.
  • Themes of the SAQ include:
    • General information
    • Organisation of the fund
    • Investment compliance
    • Valuation
    • NAV determination
    • Expenses & income
    • Relationship with depositary

These circulars reinforce the regulatory requirements for Luxembourg investment fund managers and investment funds supervised by the CSSF in the areas of governance and internal controls, as well as AML/CTF. It is essential for IFMs and investment funds to carefully consider the content and requirements introduced by these circulars and be prepared for compliance.

Takeaway

Our Governance and AML experts are available to support you in ensuring that these requirements are fully understood and help you prepare for compliance. We invite our clients to join us for detailed information sessions in February and March 2022.