REGULATORY CLIENT UPDATE / NOVEMBER 2021
Highlights:
The CSSF has published today updated FAQs with information on the holding of ancillary liquid assets by UCITS funds. The CSSF also released new guidance to simplify the procedure for financial sector IT outsourcing.
Luxembourg Market Update:
Luxembourg’s investment fund assets reached €5.65trn at the end of August, according to the CSSF. Interestingly, the regulator noted the Chinese property developer Evergrande by saying that the exposure of Luxembourg investment vehicles, mostly to Evergrande’s debt, totalled €677m at the end of July, equivalent to 0.01% of the sector’s assets.
Regulatory Developments in and beyond Luxembourg:
14 September 2021: Circular CSSF 21/783 on the application of the Guidelines of the European Securities and Market Authority on the MiFID II/MiFIR obligations on market data
The purpose of the circular is to inform the industry that the CSSF applies the Guidelines of ESMA on the MiFID II/MiFIR obligations on market data (Ref. ESMA70-156-4263), published on 18 August 2021. Consequently, the CSSF has integrated the Guidelines into its administrative practice and regulatory approach with a view to promote supervisory convergence in this field at European level. All regulated markets, market operators, credit institutions, investment firms and market operators operating an MTF or an OTF, APAs and SIs must duly comply with them.
1 October 2021: Circular CSSF 21/784 – Periodic prudential reporting of investment firms
The purpose of the circular is to inform the entities concerned of the periodic reporting requirements for investment firms and of the publication of the document “Reporting Handbook for Investment Firms.”
14 October 2021: CSSF publishes Circular 21/785 on material IT outsourcing
The CSSF released Circular CSSF 21/785 replacing the prior authorisation obligation of material IT outsourcing by a simple prior notification to the CSSF. This change will affect the requirements in Circulars 12/552, 17/656, 20/758 and 17/654 (as amended).
The respective communiqué outlines the transitional measures concerning applications for the authorisation of physical IT outsourcing submitted to the CSSF before the date of entry into force of the Circular (15 October 2021).
22 October 2021: AML updates in the CSSF Newsletter
The CSSF draws the attention of financial sector professionals to the redesign of the website of the Ministry of Finance which is notably competent for international financial sanctions, following the entry into force of the Law of 19 December 2020 on the implementation of restrictive measures in financial matters: https://www.cssf.lu/en/Document/law-of-19-december-2020
In this respect, the Ministry also updated its best practice guides on financial sanctions which are available in French and in English on the Ministry’s website at: https://mfin.gouvernement.lu/en/dossiers/2018/sanctions-financiaires-internationales.html.
22 October 2021: Final Report on SFDR RTS regarding taxonomy-related disclosures
The European Supervisory Authorities or ESAs (EBA, EIOPA and ESMA) presented the European Commission with their Final Report on the draft Regulatory Technical Standards (RTS) regarding taxonomy-related pre-contractual and periodic disclosures under SFDR, as amended by the Taxonomy Regulation (Taxonomy RTS).
The additional disclosure requirements in the Taxonomy RTS only concern those article 8 and 9 SFDR funds that make sustainable investments contributing to environmental objectives.
The European Commission now has three months to decide whether to endorse the Taxonomy RTS.
3 November 2021: Update of CSSF FAQs providing clarifications on the holding of ancillary liquid assets by UCITS
The CSSF has published today updated FAQs with information on the holding of ancillary liquid assets by UCITS foreseen under article 41 (2) b) of the Law of 17 December 2010. These updates aim at clarifying the circumstances and the extent to which UCITS are allowed to hold ancillary liquid assets. In this context, some aspects of UCITS and MMF diversification rules have also been clarified.
The new questions have been included in the following FAQs:
UCITS are expected to comply with the conditions described in these questions as soon as possible and by 31 December 2022 at the latest, considering the best interests of investors.
For further information, please contact:
Tobias Ettlin
m: +352 691 111 931
tobias.ettlin@one-gs.com
Disclaimer: This regulatory update has been prepared for clients of ONE group solutions and its subsidiaries for informational purposes and is not intended to be relied upon as professional advice. Please visit: https://www.one-gs.com/
We operate around the principle that if our people have a stake in the business, they will do a better job for our clients. We have a committed and stable team, as they see the benefit of long-term value creation through building long-standing relationships. We build value for clients, and their end customer.
You can have the best technology and the most efficient processes in the world, but if you don’t have the people to operate them, your business is worth very little. Thus, our biggest asset is our team of professional and passionate experts.
We operate next generation technology through a combination of in-house, and best in market solutions to deliver an impeccable service and use technology to excel in both service delivery and efficiency.
We delight in valued long-term partnerships with clients, team, industry partners and our stakeholders. We aim to work with clients who share our belief in the importance of building strong partnerships over time.
