Newsflash – Circular CSSF 22/827
The CSSF published Circular CSSF 22/827 which updates on provisions relating to credit institutions and investment firms of EU origin established in Luxembourg
On 23 December 2022, the CSSF published Circular CSSF 22/827 (the Circular) which updates Circular CSSF 07/325 on provisions relating to credit institutions and investment firms of EU origin established in Luxembourg by way of branches or exercising activities in Luxembourg by way of free provision of services.
The Circular has significantly amended the circular CSSF 07/325 in particular on:
Information to be recorded by Luxembourg Branch infrastructure (section II.1.3 of the Circular)
The CSSF now requires that such branch records telephone conversations or electronic communications relating to transactions concluded when dealing on own account and the provision of client order services that relate to the reception, transmission and execution of client orders as well as those that are intended to result in such transactions.
Self-assessment questionnaire (SAQ) to be submit to the CSSF annually (section II.4.3, 1, (b), point 26 of the Circular)
The SAQ is applicable to Luxembourg branches of credit institutions whose head office is in another Member State and includes the following:
MiFID
Description
Overview of the organisational and operational setup with regard to MiFID, as well as a description of investment services and financial instruments offered by the branches to their clients. This section shall include information on distribution and communication means and on the client database.
Exemptions
Branches that did not provide any investment services or sell or advise in relation to structured deposits during the financial year.
PSD 2
Description
Overview of payment services and a description of the interface through which those payment services are offered to clients.
Exemptions
Branches that did not provide any payment services during the financial year.
Depositary bank
Description
Quantitative and qualitative overview of the UCI depositary function and the related services as well as a self-assessment against the main legal requirements.
Exemptions
Branches that did not provide depositary and related services.
The SAQ is available in digital form and must be reviewed and electronically signed by the authorised management and transmitted via the CSSF eDesk portal within six months after the closure of the financial year. A user guide is available via the CSSF eDesk portal.
External audit (section 2 of the Circular)
The CSSF allows the possibility for the statutory auditor (réviseur d’entreprises agréé, “REA”) to prepare two separate reports instead of one report covering both topics (i.e. a description of the procedures and controls in place within the branch and as an appraisal by the REA.
This new Circular builds on the provisions of the long form report introduced by Circular CSSF 22/821 and now requires a significant new reporting for credit institutions.
