The Financial Sector Supervisory Commission of Luxembourg (CSSF) decided to maintain the countercyclical capital buffer, CCyB, rate for banks at 0.50%, for the third quarter of 2022. In addition, CSSF published a template for outsourcing a critical or important business process and issued a statement on the authorization requirements for crowdfunding service providers. CSSF also published circulars on the internal governance and risk management and on the adoption of guideline and recommendation on exercising the options and discretions available in the European Union law.
Below are the key highlights of these recent updates:
- CSSF published Regulation No. 22-03 to set the countercyclical buffer rate for banks at 0.50%, for the third quarter of 2022. Annex 1 to the regulation lays out elements that have been considered in setting the applicable countercyclical buffer rate while Annex 2 presents the text of the Systemic Risk Committee recommendation. The regulation shall come into force on the day of its publication in the Official Journal of the Grand Duchy of Luxembourg.
- Also published is a notification template to be used as of July 01, 2022 by in-scope entities when outsourcing a critical or important business process in accordance with points 59 and 60 of the Circular CSSF 22/806 on outsourcing arrangements. Significant credit institutions are required to use this template to notify the European Central Bank (ECB) to the extent that no ECB specific notification template is available yet. The in-scope entities include credit institutions, investment firms, and payment institutions and electronic money institutions. This template shall not be used to notify critical or important outsourcing of operational tasks of "UCI" administration and critical or important Information and Communication Technology (ICT) outsourcing.
- The CSSF statement requests crowdfunding service providers benefiting from the transitional period for authorization, which ends on November 10, 2022, to inform the CSSF accordingly as soon as possible (by providing notably their identifying data, a description of their activity and the link to the dedicated website). These platforms, should they intend to continue the provision of crowdfunding services, need to obtain an authorization as European crowdfunding service provider from CSSF by November 10, 2022 at the latest. Pursuant to Article 48 of the Regulation on European Crowdfunding Service Providers, existing crowdfunding service providers operating under the national law may continue to provide services within the meaning of the Regulation on European Crowdfunding Service Providers until they obtain the authorization in accordance with the Regulation until November 10, 2022 at the latest. Any legal person incorporated in Luxembourg that intends to provide crowdfunding services within the meaning of the Regulation on European Crowdfunding Service Providers and that has not been active before November 10, 2021 must have been duly authorized by CSSF before providing any crowdfunding service.
- CSSF published the Circular CSSF 20/758 on central administration, internal governance, and risk management. The circular specifies the measures investment firms must take pursuant to the provisions of the Law on the financial sector and Regulation CSSF No 15-02 relating to the supervisory review and evaluation of central administration, internal governance, and risk management. The circular reflects the European and international principles, guidelines, and recommendations that apply in this respect, translating them, in a proportionate way, in the context of the financial sector in Luxembourg.
- CSSF published Circular CSSF 22/816 on adoption of guideline and recommendation of ECB regarding the exercise of certain options and discretions available in the European Union law by national competent authorities. The Capital Requirements Regulation (CRR) and the Delegated Regulation (EU) 2015/61 contain a number of options and discretions available to national competent authorities in the course of their supervision. The ECB guideline and recommendation specify how such options and discretions should be applied with respect to the less significant institutions. Via this circular, CSSF extends the application of the ECB guideline and recommendation to all CRR investment firms as well as to all Luxembourg branches of credit institutions or CRR investment firms incorporated in a third country.
- Notification on CCyB Rate (in French)
- Regulation on CCyB Rate (in French)
- Communication on Template for Outsourcing
- Circular CSSF 20/758
- Statement on Crowdfunding Service Providers
- Circular CSSF 22/816
Keywords: Europe, Luxembourg, Banking, Lending, CCyB, Regulatory Capital, Basel, Governance, Crowdfunding Service Providers, Crowdfunding Regulation, CRR, Outsourcing, CSSF
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