01 June 2023



The CSSF has extended its deadline for SFDR data collection exercise stating that the relevant information should be provided on a best-efforts-basis by 15 June 2023 (i.e. the initial deadline), and by 31 October 2023 at the latest.

Luxembourg Market Update:

The aggregate assets of Luxembourg-domiciled alternative investment funds amounted to €1,672bn at the end of last year, up 24% from a year earlier, according to the latest Management Companies study by PwC Luxembourg. The report's authors say the assets of non-regulated alternative funds reached more than €1,000bn, an increase of 45%, at a time when Luxembourg funds' total volume of assets under management fell from a record €5,315bn at the end of 2021 to €4,944bn (according to the CSSF's different criteria, the aggregate assets of UCITS and Part II funds, SIFs and SICARs declined by 14% from €5,859bn at the end of December 2021 to €5,028bn a year later). The PwC report says UCITS assets declined to €3,272bn at the end of last year, while their share of the industry total declined from 75% to 66%.

Regulatory Developments in and beyond Luxembourg:

6 April 2023: CSSF issues supervisory priorities in Sustainable Finance

The CSSF published its supervisory priorities in Sustainable Finance. As regards to the asset management industry, these comprise:

  • Organisational arrangements of IFMs, including the integration of sustainability risks by financial market participants;
  • Verification of the compliance of pre-contractual and periodic disclosures;
  • Verification of the consistency of information in fund documentation and marketing material;
  • Verification of the compliance of product website disclosures;
  • Portfolio analysis, i.e. compliance with the ESMA Supervisory Briefing of 31 May 2022 to ensure that portfolio holdings reflect the name, the investment objective, the strategy, and the characteristic displayed in the documentation to investors. 

6 April 2023: CSSF updates its FAQ on virtual assets for UCIS

The CSSF has published an update of its Virtual Assets FAQ for Undertakings for Collective investment (UCIs). 

The update contains a modification of question 2 on whether an AIF may invest in virtual assets and a new question 3 on the need for AIFs investing directly or indirectly in virtual assets to obtain the “Other-Other Fund-Virtual assets” licence to manage virtual assets. Question 3 A. states that while funds investing in virtual assets target funds should comply with the requirements established into the FAQ, similarly to any direct or indirect exposure, no application for the “Other-Other Fund-Virtual assets” licence is required, although indeed the authorisation to manage fund of funds is still mandatory. 

11 April 2023: FinDatEx publishes EMT v4.1

FinDatEx has published v4.1 of the European MiFID Template (EMT). It contains ten new optional fields to comply with the upcoming UK consumer duty regime, which applies as of 31 July 2023 for financial products and services. According to FinDatEx, the UK FCA expects manufacturers to communicate the outcome of their initial assessment by end of April.

The EMT v4.1 will be used in parallel with v4.0, depending on whether a product is being distributed into the UK or not.

12 April 2023: ESAs launch consultation on PAI and financial product disclosures

The three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) have published a Consultation Paper with amendments to the Delegated Regulation of the Sustainable Finance Disclosure Regulation (SFDR).

The ESAs are proposing changes to the disclosure framework to address issues that have emerged since the introduction of SFDR, which concerns sustainability indicators in relation to principal adverse impacts as, and to propose amendments to RTS on pre-contractual and periodic documents or and on website product disclosures for financial products, to include greenhouse gas (GHG) emissions reduction targets, including intermediary targets and milestones and actions pursued. 

14 April 2023: EC publishes answers to ESAs SFDR questions and amendments to existing answers

The European Commission (EC) has published answers to the European Supervisory Authorities’ (ESAs) questions relating to the interpretation of SFDR that were issued in September 2022. Of note, the answers cover:

  • The interpretation of the notion “sustainable investments”;
  • The disclosure of carbon emissions reduction as an environmental characteristic under Article 8 SFDR;
  • The meaning of PAI “consideration” in Article 7(1), point (a), SFDR.

In addition, the EC issued amendments regarding existing answers to SFDR interpretation questions that were submitted by the ESAs and adopted on 6 July 2021 and 13 May 2022. The related decision by the EC is available on the Commission’s website.

20 April 2023: EU Parliament votes in favour of MiCA

The EU Parliament voted in favour of the Markets in Crypto-asset Regulation (MiCA) delivering its final blessing on the draft law that was informally agreed in June 2022 with the Council. The next step is the formal endorsement by the Council leading to the publication of the EU Official Journal which will trigger the entry into force of the Regulation 20 days later. Considering the transitional period, the MiCA provision will take effect in 2024. 

4 May 2023: CSSF extends deadline for SFDR data collection exercise

On 4 May 2023, the CSSF informed the industry about a deadline extension for the SFDR data collection exercise about pre-contractual disclosures launched on 24 March 2023. The CSSF states that the information is to be provided on a best effort basis by 15 June 2023 (i.e. the initial deadline), and by 31 October 2023 at the latest. The CSSF further reminds that after the initial declaration, Financial Market Participants (“FMPs”) remain responsible for ensuring that the information provided is being kept up to date and that in case of changes to the pre-contractual documents/templates, FMPs must update the data reported under the SFDR data collection by transmitting subsequent declarations.

5 May 2023: CSSF FAQ on SFDR

The CSSF has updated the document its FAQ document on SFDR which is available here. Of note:

  • Use of “ESG” and/or sustainability-related terminology in the names of investment funds: the CSSF reminds financial market participants (FMPs) that, in accordance with the ESMA Supervisory Briefing on sustainability risks and disclosures in the area of investment management, ESG-related terms (such as “ESG”, “green”, “sustainable” , ”social”, “ethical” or “impact”) should only be used in the names of investment funds when supported in a material way by the ESG or sustainability characteristics, themes or objectives described in the pre-contractual disclosures of the relevant investment fund. In other words, the CSSF expects FMPs disclosing under Articles 6, 8 or 9 of the SFDR to use fund names which are not misleading and aligned with the relevant fund documentation. The CSSF also recommends that FMPs consider any further developments at European level in this area. This is probably a reference to the ESMA Guidelines on funds’ names using ESG or sustainability-related terms, which are under preparation.
  • Disclosure of the methodology used to define “sustainable investments”: The CSSF clarifies that the methodology applied by FMPs to determine whether an investment qualifies as “sustainable investment” within the meaning of Article 2(17) of the SFDR (for example, the threshold used when applying a pass-fail approach) should be made available to investors. This can be done, for instance, through the mandatory pre-contractual templates, prospectus/issuing document and/or Article 10 SFDR website disclosures.
  • Article 9 SFDR products: use of EPM for hedging purposes in the “#2 Not Sustainable” portion of the portfolio: while the CSSF acknowledges that efficient portfolio management (EPM) techniques may be used by FMPs for many purposes, it nevertheless considers that only EPM techniques used for hedging purposes only can fall within the “remaining portion” (that is, “#2 Not sustainable”) of the investment portfolio of investment funds subject to Article 9 of the SFDR. The CSSF also reminds FMPs that they remain responsible for assessing the actual purpose of any EPM techniques used and thus whether they could fall within the “remaining portion” of the investment portfolio.

16 May 2023: Circular CSSF 23/833 – Requests and reporting to the CSSF

The new Circular CSSF 23/833 repeals Circulars CSSF 08/334 (on encryption specifications for reporting firms) and CSSF 08/344 (on the provisions relating to the transmission of reporting files to the CSSF). It describes the means of communication between professionals and the CSSF.

16 May 2023: Law implementing DAC 7 in Luxembourg

The Luxembourg Parliament has adopted a law amending Directive 2011/16/EU on administrative cooperation in the field of taxation (“DAC 7”).

The law contains several provisions that complement and extend existing domestic rules on tax transparency and exchange of information. These include:

  • Introduction of new rules on mandatory automatic exchange of information reported by digital platform operators.
  • Introduction of automatic and mandatory exchange of information on persons resident in other Member States with respect to their ownership of real estate assets (exchange to cover information on taxable periods from 1 January 2025).
  • Introduction of a framework for conducting joint audits with other Member States.
  • Clarification of the scope and mechanism of the exchange of information between tax authorities of different Member States via, inter alia, the definition of the concept of “foreseeable relevance” and clarification as regards requests about a group of taxpayers who cannot be individually identified.
  • Clarification of the data protection obligations imposed on Luxembourg reporting financial institutions by the amended Luxembourg law of 18 December 2015 implementing the Common Reporting Standard (CRS), along with introduction of data protection obligations for Luxembourg reporting intermediaries under the Luxembourg law of 25 March 2020 implementing Council Directive (EU) 2018/822 of 25 May 2018 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements (DAC 6).

17 May 2023: Parliament adopts law on Whistleblower Protection

The law transposing the EU Directive 2019/1937 was published in the Official Memorial. The new law requires entities in the financial, private and public sector to implement internal and external reporting channels for whistleblowers and specific arrangements for their protection. Since the law goes far beyond existing requirements, many entities in scope will have to update their systems or implement new ones.

24 May 2023: European Commission releases Retail Investment Package

The European Commission has published its Retail Investment Strategy (RIS) package. The proposed legislative measures consist of an Omnibus amending Directive with five main sections referring to the different Directives to be amended, i.e. MiFID II, IDD, Solvency II, UCITS/AIFMD and of a draft regulation amending the PRIIPs Regulation.

26 May 2023: Survey in relation to Circular CSSF 21/769 on Teleworking

The CSSF has informed supervised entities that it is performing a data collection exercise, as part of the requirement of Circular CSSF 21/769, as amended. A short questionnaire addressed to selected supervised entities will be sent in the near future.

For further information, please contact:

Tobias Ettlin

m: +352 691 111 931

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:

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