Financial Crime World

Luxembourg Banks Face Increased Regulatory Pressure

As the financial regulatory environment continues to evolve, Luxembourg-based banks and investment firms are facing increased pressure to comply with an array of complex and fast-moving regulations. In order to meet these demands, PwC is offering expert guidance and support to help organizations navigate the ever-changing landscape.

Governance Rules: Who’s Subject?

In Luxembourg, banks and investment firms must adhere to corporate governance rules outlined in various regulations and CSSF Circulars. Specifically:

  • Banks are subject to CSSF Circular 12/552 on central administration, corporate governance, and risk management.
  • Investment firms fall under the purview of CSSF Circular 20/758.

What is Governance All About?

The regulatory framework aims to define and implement a clear organisational structure, effective decision-making process, robust internal control framework, sound administrative and accounting procedures, consistent lines of responsibility and reporting, and effective processes for identifying, managing, and reporting risks.

PwC Can Help You

Our team of experts at PwC can assist clients in:

  • Identifying and assessing the regulatory and operational impacts related to the successive revisions of CSSF Circular 12/552 and the recent CSSF Circular 20/758.
  • Impact assessments on governance frameworks, internal governance mechanisms, and individual and collective suitability of management bodies.

EMIR: Who’s Subject?

European Market Infrastructure Regulation (EMIR) applies to all financial counterparties, including:

  • Credit institutions
  • Investment firms
  • UCITS
  • Non-financial counterparties such as corporates, professionals in the financial sector, and securitisation entities

The regulation aims to reduce systemic risk by increasing transparency and ensuring that derivatives are traded on regulated markets.

Sustainable Finance: Who’s Subject?

The new Sustainable Financial Disclosure (SFDR) regulation applies to:

  • Financial market participants, including credit institutions, investment firms providing portfolio management services, alternative investment fund managers, UCITS management companies, and investment advisers

The objective of SFDR is to increase transparency on environmental, social, and governance products by reducing the asymmetry of information between end-investors and financial entities.

PSD2: Who’s Subject?

As a payment service provider located in the European Economic Area (EEA), you are subject to the Payment Services Directive 2 (PSD2) for all transactions performed within the EEA. PSD2 aims to:

  • Enhance the regulatory framework for payment services by regulating and harmonizing payments market processes
  • Improve system security
  • Strengthen consumer rights
  • Reduce overall costs

By partnering with PwC, Luxembourg-based banks and investment firms can ensure compliance with these regulations while minimizing disruption to their business operations. Our team of experts is well-equipped to provide guidance on governance rules, EMIR, sustainable finance, PSD2, and other regulatory requirements. Contact us today to learn more about how we can help you navigate the complex world of financial regulation.