CSSF Issues Reporting and Other Regulatory Updates for Banks

Below are the key details of the recent updates:

• The recently published Regulation No. 22-07 sets out the updated list of other systemically important institutions authorized in Luxembourg under the Capital Requirements Regulation (CRR), along with the capital buffer rates applicable to them. As of December 31, 2022, these institutions are State Bank and Savings Bank (Luxembourg), International Bank in Luxembourg, BGL BNP Paribas, Clearstream Banking SA, RBC Investor Services Bank SA, and Societe Generale Luxembourg. The buffer rate for these institutions remains the same as last year and has been set at .50% as applicable from January 01, 2023.
• Circular 22/824 implements requirements of the EBA Guidelines on Loan Origination and Monitoring (EBA/GL/2020/06) and will apply from March 31, 2023 to credit institutions that are less significant institutions. The EBA Guidelines aim to ensure that in-scope entities have prudent loan origination and monitoring standards in place to prevent newly originated performing loans from becoming non-performing in the future and specify the internal governance arrangements for granting and monitoring of credit facilities throughout their lifecycle. CSSF also intends to publish a set of dedicated frequently asked questions (FAQs) to further clarify different aspects covered by the circular.
• Circular 22/823 amends the Circular 14/593 and informs credit institutions about the recent and future developments regarding supervisory reporting. The amendments include the abolition of table B 4.4 (titled "List of head offices, agencies, branches and representative offices") and the update of the instructions for table B 4.5 (titled "Analysis of Shareholdings"). From reporting period 2022-12 onward, all shareholders holding or controlling 10% or more of the parts or voting rights in a credit institution have to be reported, thus also including all indirect shareholders. It is to be noted that until the reporting period 2021-12 only direct and ultimate shareholders had to be reported.
• Circular 22/827 amends Circular 07/325 and addresses provisions related to credit institutions and investment firms originating in another member state and established in Luxembourg through branches or carrying on business there under the freedom to provide services. It provides further details on the principle of freedom of establishment by way of branches and free provision of services for credit institutions and investment firms whose head office is in another member state. The circular also provides additional information on the role of the CSSF as host authority and points out to credit institutions and investment firms whose head office is in another member state the provisions that their Luxembourg branches must comply with under the Markets in Financial Instruments Directive (MiFID II or 2014/65/EU), which was transposed into Luxembourg law through the Law of May 30, 2018 on markets in financial instruments (MiFID II Law). 

Related Links (in French and English)

• O-SII Designations 
• News on Repeal of COVID-19 Measures
• Circular 22/824 on Loan Origination Guidelines
• Circular 22/823 on Reporting Requirements
• Circular 22/827 for Branches of Financial Entities

Keywords: Banking, Disclosures, Loan Origination, Lending, Europe, Luxembourg, Covid 19, Reporting, FAQ, Basel, Investment Firms, Regulatory Capital, CSSF, O-SII Buffer