Regulatory News Alert
You can find here the latest national, European or international regulatory updates analysed by Deloitte.
On 4 August 2017 the Chambre des Députés published the draft law 7164 executing the Benchmark Regulation (BMR) in Luxembourg law.
On 23 August 2017, the EU Commission released in this framework a consultation on how to better integrate post-trade activities across the EU.
On 3 August 2017, the Commission de Surveillance du Secteur Financier (CSSF) published Circular 17/665 aiming to implement ESMA’s guidelines on the assessment of knowledge and competence of 22 March 2016.
The Luxembourg Commission des Normes Comptables (CNC) published 4 new Q&As in July. These Q&As aim to clarify some provisions of the Law of 18 December 2015 implementing the new Accounting Directive.
On 20 July 2017, the European Securities and Markets Authority (ESMA) issued an opinion to the intention of the Commission to update the current legislations on UCITS, AIFMD, and CSDR.
ESMA’s opinion setting out general principles aimed at fostering consistency in authorization, supervision and enforcement related to the relocation of entities, activities, and functions from the UK
The Law of 13 June 2017 (hereinafter the ‘Law’) transposing the Payment Account Directive (PAD) has been published in the Memorial A on 14 June 2017.
The Benchmarks Regulation (“BMR”) introduces a regime for benchmark index providers that will ensure the accuracy and integrity of benchmarks across the EU.
On 3rd July 2017, the Luxembourgish Chamber of Deputies released the much anticipated draft law 7157 transposing Directive 2014/65/EU on MiFID II and implementing the Regulation 600/2014/EU on MiFIR. Most of the topics related to the later will be regulated under a specific law, while the provision of investment services will still be covered by the law of 5th April 1993 related to the financial sector (LSF), modified to align with the new requirements.
On 1 June 2017, the Commission de Surveillance du Secteur Financier (CSSF) published an updated version of its Q&As on how to obtain authorisation as Financial Sector Professionals (FSPs).
On 16 June 2017, the Commission de Surveillance du Secteur Financier (CSSF) issued Circular CSSF 17/658, adopting the EBA Guidelines on sound remuneration policies under Articles 74(3) and 75(2) of Directive 2013/36/EU (EBA/GL/2015/22) and repealing Circular CSSF 10/496.
On 2 June 2017, ESMA published the much anticipated “Final report on product governance guidelines,” which closes the process launched in October 2016 with the publication of a consultation paper that has been subject to a lot of comments from the industry.
On 1 June, the EBA published the EU Commission’s proposed amendments to its draft RTS on Strong Customer Authentication (SCA) and common and secure communication under the revised Payment Services Directive (PSD2).
On The European Central Bank (ECB) published on 15 May 2017 the Guide to fit and proper assessments.
The Foreign Exchange Working Group (FXWG) under the Bank for International Settlements published on 25 May 2017 a global code of conduct for wholesale foreign exchange markets.
On 16 May 2017, the European Council adopted a new regulation aimed at supporting the role of money market funds (MMF) in financing the economy.
On 17 May 2017, the CSSF published four circulars on IT outsourcing.
The circular intends to clarify the regulatory framework for recourse to cloud computing infrastructure supplied by an external service provider.
The CSSF issued a communication to remind NFCs of their obligations toward EMIR, and specifically, to remind the NFCs that are not prudentially supervised by the CSSF that they fall in scope of the obligations introduced by EMIR as soon as they conclude derivative transactions.
The Circular BCL 2017/240 issued by the Banque Centrale de Luxembourg (BCL) on 21 April 2017, in line with Regulation ECB/2016/13 (AnaCredit), applies to all credit institutions.
Following the adoption by the Commission of a Report on the review of EMIR on November 2016, the Commission released on the 3rd of May its proposed draft update of the EMIR regulation (EMIR II).
The European Council officially approved the revised PRIIPs Regulatory Technical Standards (RTS) on 3 April 2017, along with the European Parliament the following day.
On 20 March, the European Central Bank published its final guidance on non-performing loans (NPLs), setting out expectations in relation to strategy, governance, and operations.
Questions and Answers on the implementation of the Regulation (EU) No 909/2014 on improving securities settlement in the EU and on central securities depositories (CSDR).
Guidelines on LCR disclosure to complement the disclosure of liquidity risk management under Article 435 of Regulation (EU) 575/2013.
On 8 March 2017, the European Commission published a revised draft of the PRIIPs Regulatory Technical Standards (RTS).
This publication is a result of the rejection by the European Parliament of the initial draft of these RTS in September 2016, citing inadequacies in the translation of the spirit of the Regulation in particular with regards to transparency and comparability.
The CSSF issued a circular (17/651) to present the main provisions introduced by the Law and in particular the new Chapter 6 of the Consumer Code.
The Law of 23 December 2016 implementing the 2017 tax reform (the Law) is, among others, extending the money laundering offence to tax crimes related to direct and indirect taxes.
On February 23, the European Banking Authority (EBA) published its updated and final Regulatory Technical Standard (RTS) on Strong Customer Authentication (SCA) and common and secure communication under the revised Payment Services Directive (PSD2).
CSSF introduces a new form of questionnaire to be used for the filing of a SIF, UCI Part II or SICAR project.
ESMA Q&A on MiFID and MiFIR transparency topics – The systematic internaliser (SI) regime.
Following the last consultation paper on UCITS share classes published in April 2016, ESMA introduced on 30 January 2017 an Opinion paper on this topic with an applicable framework for UCITS share classes.
On 28 December 2016, the draft Law 7025 implementing Directive 2014/17/EU on credit agreements for consumers relating to residential immovable property has been published in Mémorial A.
Introduction of a notification form, in line with the framework set by Circular CSSF 02/77, on NAV calculation errors and non-compliance with the investment rules.
The CSSF sent out a second Circular Letter to UCITS’ management companies requesting to perform a UCITS Risk Reporting.
On December, 9th 2016, the European Parliament published an informal agreement reached by European Parliament, Council and Commission negotiators on shareholders’ right to vote on directors’ pay.
The European Central Bank (ECB) launched on 12 November a public consultation on a draft guide to fit and proper assessments.
On 21 November 2016, the European Banking Authority (EBA) published additional information on the application of the proportionality principle to the remuneration provisions laid down in the Capital Requirements Directive in response to a request for advice from the European Commission.
Three years on from CRD IV/CRR being finalized, the EU’s banking sector now faces a revised Capital Requirements Directive and Capital Requirements Regulation (CRD V and CRR II), and a host of other legislative amendments (notably on the Bank Recovery and Resolution Directive, BRRD), in a 500+ page package published by the European Commission on 23 November 2016.
On November 4th 2016 the EBA released a discussion paper (DP) setting out possible options for a new prudential regime for investment firms, particularly those that are not deemed “systemic and bank-like”.
New Regulatory technical standards on data to be reported to trade repositories in line with new rules on collateral exchange
On April 2016, the CSSF sent a circular letter to management companies, which requested them to perform a UCITS Risk Reporting with the first reporting on 31 March 2016. This new reporting is composed of eight sections with section I applying to all UCITS and sections II to VIII applying only to UCITS with AuM over €500 million or leverage over 250 percent.
The European Commission has today proposed an extension to the date of application of the Regulation on Key Information Documents for Packaged Retail and Insurance-based Investment Products (PRIIPs).
On October 14th 2016, the European Securities and Markets Authority (ESMA) published its Final guidelines on sound remuneration policies under the UCITS Directive and the AIFMD.
Circular CSSF 14/587 anticipated different dimensions of the UCITS V framework.
The text was due to be repealed and replaced by a new CSSF Circular as soon as the EU Commission delegated Regulation (EU) 2016/438 would enter in effect, “in order to adapt its content to the provision of the final Commission Delegated Regulation”.
Following the publication of the CSSF Annual Report 2015, you will find a summary of remarks made by the CSSF with respect to investment management.
On 4 October 2016, the European Commission has endorsed the Commission Delegated Regulation (CDR) with regards to the Regulatory Technical Standards (RTS) for risk mitigation techniques for OTC derivative contracts not cleared by a central counterparty.
On 28 September 2016, the European Banking Authority (EBA) published its final guidelines on remuneration policies and practices related to the sale and provision of retail banking products and services.
On 28 September, the European Banking Authority (EBA) published the final report on the application of the definition of default under Article 178 of the Capital Requirements Regulation (CRR). A separate report was published for the results of the quantitative impact study (QIS).
Following the publication of the CSSF Annual Report 2015, you will find a summary of key attention points for credit institutions, PSFs and the supervision of information systems.
On 29 July 2016, the draft Law 7025 implementing Directive 2014/17/EU on credit agreements for consumers relating to residential immovable property (the Directive) has been published.
Following on from the European Parliament’s Committee on Economic and Monetary Affairs vote to reject PRIIPs KID delegated regulations two weeks ago, the European Parliament plenary session of 14 September 2016 overwhelmingly voted to reject the implementation of PRIIPs legislation.
Following the vote today to adopt the motion to reject the Commission delegated regulation (the level 2 guidelines) as issued on the 30th June 2016 these guidelines will require revision taking into consideration the concerns raised by the ECON.
ECON (the EU Parliament’s Committee on Economic and Monetary Affairs) has drafted a motion for resolution calling for the rejection of the PRIIPs RTS issued on the 30th June 2016, citing what it states as inadequacies in the translation of technical requirements.
The Law of 4 August 2016 on disclosure of non-financial and diversity information applicable to some large companies and some groups has been published on Memorial A.
On 14th July 2016, Luxembourg Parliament passed a new law introducing a new type of Luxembourg investment vehicle named the Reserved Alternative Investment Fund (RAIF).
The Luxembourg Law implementing the Audit Market Reform was published on Mémorial A on 28 July 2016.
On 12 July 2016, the European Commission adopted the EU-US Privacy Shield framework with an adequacy decision. By notifying the Member States, the new framework for EU - US personal data transfers enters into force immediately.
The Luxembourg parliament voted on a law regarding the Reserved Alternative Investment Fund (Fonds d’Investissements Alternatifs Réservés - RAIF). This law, along with the law voted yesterday on the modernization of the law of 10 August 1915 on commercial companies as amended (the “Company Law”), both offer an attractive legal framework for different investors looking to structure their investments through Luxembourg.
Modernization and competitiveness of the Luxembourg market
The threats associated with money laundering and terrorist financing are constantly evolving. And the recent terrorist attacks in the European Union and beyond demonstrate the urgent need for a strong coordinated European response and also the need to swiftly adapt current rules on a regular basis.
On June 1st, the European Central Bank (ECB) published the final version of the AnaCredit Regulation on the collection of granular credit and credit risk data as well as the related amending decision on the organisation of preparatory measures for the collection of granular credit data by the European System of Central Banks.
On June 17th, the Council of the EU adopted the text that delays the implementation of MiFID II/MiFIR by one year to 3 January 2018. The Parliament had already adopted the text on 7 June. The final step for the text is to be published in the Official Journal (OJ) which we expect to take place in late June, ahead of the transposition deadline of 3 July 2016.
On 28th September 2015, ESMA delivered a first set of draft regulatory technical standards related to the market abuse regulation and submitted it to the European Commission.
On 10 May 2016 the draft bill 6624 has been voted by the Luxembourg Parliament.
Form for compliance
On May 18th 2016, the CSSF published a form aiming to gather information on existing (pre UCITS V) remuneration practices of companies/entities falling under the UCITS V Regime and to anticipate on possible requests from relevant entities to rely on the proportionality principle in the future.
The Law of 10 May 2016 amending the Law of 11 January 2008 on transparency requirements and the Law of 10 July 2005 on prospectuses has been published on 12 May 2016 in the Luxembourg Official Journal.
European regulators are uncovering non- compliant websites and marketing documents
Contents of marketing materials, such as factsheets and the further information which management companies post on their websites are at the very heart of investor protection frameworks. Ensuring their compliance with EU and local rules constitutes a major piece of the overall compliance program which management companies and fund boards must implement.
The European Securities and Markets Authority (ESMA) has published guidelines on July 2013 on sound remuneration policies under the Alternative Investment Fund Managers Directive.
On May 4th 2016, ESMA published the list of the competent authorities who comply or intend to comply with ESMA's guidelines on sound remuneration policies under the AIFMD.
Following the publication of the final draft RTS on 7 April 2016, the main challenge for asset managers will be the exchange of cost, risk and performance data to support other PRIIP manufacturers in the preparation of product KIDs, in particular for the insurance industry.
On April 26th 2016, the CSSF has issue a new Circular Letter concerning UCITS Risk Reporting applying to all Luxembourg domiciled UCITS.
On April 7, 2016 the European Commission adopted a first set of delegated rules for the new MIFID II framework, in the form of Delegated Directive.
The Chamber of Deputies voted for the draft law 6845 to transpose the Directive 2014/91/UE (“Directive UCITS V”) – which was adopted by the European Union in July 2014.
On 24 March, the long awaited UCITS V Level 2 on depositary regime has been published on the European Official Journal.
The European Securities and Markets Authority (ESMA) published on March 31st 2016 its final guidelines on sound remuneration policies under the UCITS V Directive.
Following the first consultation paper on UCITS share classes in December 2014, ESMA introduced on 6 April 2016 a new consulting paper on this topic with their current thinking regarding a framework for UCITS share classes. This paper states high level principles and new operational principles.
On 22 March 2016, the Chambre des Députés published draft Law 6969 ("the draft Law") implementing: Directive 2014/56/EU and Regulation (EU) No 537/2014.
On 17 March 2016, the Law of 15 March 2016 on OTC derivatives, central counterparties and trade repositories has been published in Memorial A.
Following the publication of the Consultation Paper in June 2015, the European Supervisory Authorities (EBA, EIOPA, ESMA - ESAs) published the 8th of March, 2016 their final draft Regulatory Technical Standards (RTS) on margin requirements for non-centrally cleared OTC derivatives under the European Market Infrastructure Regulation (EMIR).
In its press release 16/10 the CSSF clarified its position on practical issues in relation to the implementation of the UCITS V regime and depositary aspects in relation to Part II UCIs.
On 23 February 2016, the Luxembourg Parliament voted the Draft Law 6846 on OTC derivatives, central counterparties and trade repositories (Draft Law). A request to waive the second vote was introduced.
In its meeting of February 10th 2016, the College of Commissioners officially announced its final position concerning the delayed coming into force of the revised Markets in Financial Instruments Directive (“MiFID II / MiFIR”).
Since the Court of Justice of the EU nullified the EU-US Safe Harbor Framework on 6 October 2015, the European Commission and the US Department of Commerce have worked to establish a new legal framework to govern transfers of personal data from the EU to the US.
On 23 December 2015, the Securities Financing Transaction Regulation (SFTR) was published in the EU Official Journal.
On 29 December 2015, the Commission de Surveillance du Secteur Financier (“CSSF”) issued CSSF Circular 15/633 on financial information to be provided on a quarterly basis by investment fund managers and their branches.
On 24 December 2015, the Law of 18 December 2015 on resolution, recovery and liquidation measures of credit institutions and some investment firms, on deposit guarantee schemes and on indemnification of investors has been published on Luxembourg official journal.
The new Luxembourg law published in Memorial A on 28 December 2015 (the Law) implements a new EU requirement to report on payments made to governments by certain groups active in the extractive industry, and various amendments related to the individual and consolidated annual accounts. The main change affects the presentation of the profit and loss account that will be presented as a list from 2016 onwards.
On 27 November, the Luxembourg Government adopted a new draft law, for the purpose of creating a new type of alternative investment fund in Luxembourg: the Reserved Alternative Investment Fund (RAIF) (Fonds d’Investissements Alternatifs Réservés).