Featured Product

    CSSF Circulars on Governance and Risk Management for Certain Entities

    December 07, 2020

    CSSF published Circular 20/759, which updates the Circular 12/552 on central administration, internal governance, and risk management. The original Circular 12/552 was earlier applicable to both credit institutions and investment firms. However, now Circular 12/552 remains applicable in its entirety to credit institutions and, in part, to professionals carrying out loan transactions. In addition, CSSF published a Circular 20/757 that repeals the Circular 12/552 for investment firms and replaces it with Circular 20/758. The Circulars 20/757, 20/758, and 20/759 have become applicable from January 01, 2021.

    Circulars 20/757 and 20/759 comply with the EBA guidelines on internal governance and on management of interest rate risk arising from non-trading book activities; these circulars also comply with the joint ESMA and EBA guidelines on  assessment of the suitability of members of the management body and key function holders. In addition, Circular 20/759 complies with the EBA guidelines on the application of the definition of default under the Capital Requirements Regulation and the specification of types of exposures to be associated with high risk. The main changes to Circular 12/552 include the following:

    • Extension of the scope to financial holding companies and mixed financial holding companies
    • Details on the application of proportionality in the establishment of internal control functions
    • Consideration of the environmental, social, and governance (ESG) risk factors, to ensure the viability of business model

    Appendix 1 to Circular 20/757 includes "track changes” version between Circulars 12/552 and 20/758, while Appendix 2 presents the main changes between Circulars 12/552 and 20/758. The Circular 20/758 specifies the measures to be taken by investment firms in terms of central administration, internal governance, and risk management. It incorporates the principles, guidelines, and European and international recommendations that apply in this area, placing them proportionately in the context of the financial sector in Luxembourg. The circular contains relevant definitions, structural requirements for central administration and internal governance, specific risk management requirements, and the specifics of entry into force of this circular.

     

    Related Links (in French)

    Keywords: Europe, Luxembourg, Banking, Securities, Investment Firms, Governance, ESG, Proportionality, Interest Rate Risk, CRR, CSSF

    Related Articles
    News

    BSP Tackles Aspects of Lending and Islamic, Open & Sustainable Finance

    The Central Bank of the Philippines (BSP) issued communications covering developments related to online lending platforms, open finance framework and roadmap, and on the expected regulations in the area sustainable finance.

    January 16, 2022 WebPage Regulatory News
    News

    US Agencies Issue Regulatory Updates, FDIC Launches Tech Sprint

    The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.

    January 13, 2022 WebPage Regulatory News
    News

    EBA Issues Guide on Bank Resolvability, Consults on Transferability

    The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).

    January 13, 2022 WebPage Regulatory News
    News

    MFSA Publishes CRD5 Updates and Supervisory Priorities for 2022

    The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0.

    January 13, 2022 WebPage Regulatory News
    News

    HKMA Extends Repayment for Trade Facilities, Consults on Crypto-Assets

    The Hong Kong Monetary Authority (HKMA) published a circular, along with the reporting form and instructions, for self-assessment, by authorized institutions, of compliance with the Code of Banking Practice 2021.

    January 12, 2022 WebPage Regulatory News
    News

    FCA Registers Securitization Repositories; PRA Issues 2022 Priorities

    The Financial Conduct Authority (FCA) decided to register European DataWarehouse Ltd and SecRep Limited as securitization repositories under the UK Securitization Regulation, with effect from January 17, 2022.

    January 12, 2022 WebPage Regulatory News
    News

    EC Regulation Sets Out Methods for Measuring K-Factors Under IFR

    The European Commission (EC) published the Delegated Regulation 2022/25, which supplements the Investment Firms Regulation (IFR or Regulation 2019/2033) with respect to the regulatory technical standards specifying the methods for measuring the K-factors referred to in Article 15 of the IFR.

    January 11, 2022 WebPage Regulatory News
    News

    BIS Studies How Platform Models Impact Financial Stability & Inclusion

    The Bank of International Settlements (BIS) published a paper that assesses the ways in which platform-based business models can affect financial inclusion, competition, financial stability and consumer protection.

    January 10, 2022 WebPage Regulatory News
    News

    CBE Issues Additional Measures to Ease Disruptions from Pandemic

    The Central Bank of Egypt (CBE) published a circular with instructions on emergency liquidity assistance to banks that are unable to meet their liquidity requirements.

    January 10, 2022 WebPage Regulatory News
    News

    ESAs Publish List of Financial Conglomerates for 2021

    The European Supervisory Authorities (ESAs) published the list of identified financial conglomerates for 2021.

    January 07, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 7868