03 July 2023


The CSSF has announced a Common Supervisory Action (“CSA”) on the application of MiFID II disclosure rules regarding marketing communications and advertisements. The CSSF informs that it will contact a sample of supervised entities and ask them to complete a dedicated questionnaire.

Luxembourg Market Update:

Credit rating agency Fitch has maintained its AAA sovereign debt rating for Luxembourg with a stable outlook. The agency notes the low level of public debt and the strength of the country's fiscal buffers and external balance sheet. According to finance minister Yuriko Backes, the country's top rating underlines the importance of government measures taken to maintain the competitiveness of companies and the purchasing power of households.

Regulatory Developments in and beyond Luxembourg:

16 May 2023: DAC 7 implemented

The Luxembourg Parliament has adopted a law implementing the 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. Reporting financial institutions subject to CRS requirements are now formally required to inform individuals of the information that they will report to the Administration des Contributions Directes (“ACD”), and to give clients the opportunity to exercise their rights as per the General Data Protection Regulation (“GDPR”), in particular the right to rectify any personal data which are not correct.

16 May 2023: CSSF publishes Circular 23/835 on MiFID II suitability requirements

The CSSF has published Circular 23/835 to inform the market that the CSSF will apply the Guidelines of ESMA on certain aspects of the MiFID II suitability requirements (ESMA35-43-3172) from 3 October 2023 onwards. The previous ESMA guidelines of 2018 will cease to apply on the same date. The CSSF further states that it will integrate the Guidelines, issued with a view to promoting supervisory convergence in this field at European level, into its administrative practice and regulatory approach. 

17 May 2023: ESAs issue consolidated Q&A on SFDR and SFDR RTS

The European Supervisory Authorities (EBA, EIOPA and ESMA – “ESAs”) have published a consolidated version (JC 2023) of the Q&A on and the SFDR RTS.

18 May 2023: IOSCO issues Policy Recommendations for Crypto and Digital Asset Markets

The International Organisation of Securities Commission (“IOSCO”) published a Consultation Report on Policy Recommendations for Crypto and Digital Asset Markets. This consultation, in the form of a list of 18 recommendations completed with 21 questions to the industry, aims at encouraging national regulators globally to harmonise their regulatory standards with regards to trading and custody of crypto and digital assets, not only across jurisdictions but also consistently with the traditional financial markets. The recommendations focus on market integrity and investor protection concerns while addressing the risk of regulatory arbitrage in the fast-growing crypto-currencies market.

The IOSCO consultation on the proposal is running until 31 July 2023. 

24 May 2023: ESMA reports results of the CSA asset valuation rules under UCITS and AIFMD

ESMA has published a report on its analysis and conclusion on the Common Supervisory Action (“CSA”) on the supervision of the asset valuation rules under the UCITS and AIFM Directives. The CSA was launched in January 2022 to examine whether Investment Fund Managers of UCITS and open-ended AIFs (i) complied with valuation-related requirements stemming from the UCITS and AIFMD frameworks; and (ii) adhered to valuation principles ensuring true and fair value.

ESMA has identified the following points:

  1. Valuation policies and procedures must be appropriate for the investment activities;
  2. Valuation under stressed market conditions;
  3. Independence of the valuation function and use of third-party valuers;
  4. Early detection mechanisms for valuation errors and transparency to investors; and
  5. Special focus should be put on valuation procedures of Private Equity and Real Estate assets.

In addition, ESMA also shared some insights on market practices and possible follow-ups considered by NCAs.

25 May 2023: ESAs propose ESG disclosures for STS securitisations

The ESAs have jointly provided to the European Commission Draft Regulatory Technical Standards (“RTS”) on the ESG impact disclosure for Simple, Transparent and Standardised (“STS”) securitisations under the Securitisation Regulation. The main proposals relate to specifying ESG disclosures for STS securitisations when the underlying exposures are residential loans, auto loans and leases. The purpose of the draft RTS is to help market participants make informed decisions about the sustainability impact of their investments and to ensure consistency with the SFDR RTS.

26 May 2023: ESMA Q&A on AIFMD

ESMA has updated its Q&A document on the AIFMD. The following question was added:Are non-EU AIFMs allowed to carry out pre-marketing activities pursuant to Article 30a of the AIFMD?”

The answer is no. Article 30a of the AIFMD does not cover pre-marketing activities by non-EU AIFMs. Therefore, non-EU AIFMs are not allowed to carry out pre-marketing activities pursuant to the AIFMD. However, national laws, regulations and administrative provisions may allow non-EU AIFMs to carry out pre-marketing activities at national level and where this is the case, non-EU AIFMs do not benefit from a passport allowing them to carry out these activities in other Member States.

In line with recital 12 of Directive (EU) 2019/1160, such national laws, regulations and administrative provisions should not in any way disadvantage EU AIFMs vis-à-vis non-EU AIFMs.

26 May 2023: Circulars CSSF 23/836, CSSF 23/837 and 23/838 – Remuneration

The CSSF has published the following three Circulars, adopting the Guidelines of the European Banking Authority (“EBA”) on remuneration data collection exercises:

  1. Circular CSSF 23/836 adopting the EBA Guidelines on the benchmarking exercises on remuneration practices, the gender pay gap and approved higher ratios under Directive 2013/36/EU (“EBA/GL/2022/06”);
  2. Circular CSSF 23/838 adopting the EBA Guidelines on the benchmarking exercises on remuneration practices and the gender pay gap under Directive (EU) 2019/2034 (“EBA/GL/2022/07”); and
  3. Circular CSSF 23/837 adopting the EBA Guidelines on the data collection exercises regarding high earners under Directive 2013/36/EU and under Directive (EU) 2019/2034 (“EBA/GL/2022/08”).

These Guidelines organise the remuneration data collection exercises, as mandated by requirements in the CRD and IFD frameworks. Entities that are in scope of the EBA exercises will be informed by letter in due course. 

31 May 2023: CSSF publishes Communiqué on MiFID II marketing CSA

The CSSF has released a Communiqué concerning a CSA on the application of MiFID II (Directive 2014/65/EU) disclosure rules with regard to marketing communications and advertisements of financial products that was launched by the European Securities and Markets Authority (ESMA) with national competent authorities (NCAs) on 16 January 2023.

The CSA aims to understand and assess how investment firms and credit institutions have implemented the respective requirements and serves as an opportunity to collect information about possible ‘greenwashing practices’ observed in marketing communications and advertisements.

The CSSF informs that it will contact a sample of supervised entities and ask them to complete a dedicated questionnaire. 

1 June 2023: ESAs publish Progress Reports on Greenwashing

The ESAs have issued their Progress Reports on Greenwashing in the financial sector (please find the reports by EBA, EIOPA, and ESMA, respectively). In these reports, the ESAs state a common high-level understanding of greenwashing applicable to market participants across their respective remits – banking, insurance and pensions and financial markets. Prior to these reports, the ESAs published a call for evidence on greenwashing in November 2022 to which ALFI responded.

Further to their reports, the ESAs understand greenwashing as a practice where sustainability-related statements, declarations, actions, or communications do not clearly and fairly reflect the underlying sustainability profile of an entity, a financial product, or financial services. This practice may be misleading to consumers, investors, or other market participants. According to the ESAs, the sustainability-related misleading claims can occur and spread either intentionally or unintentionally and in relation to entities and products that are either within or outside the remit of the EU regulatory framework.

The ESAs will publish their final reports in May 2024.

13 June 2023: Luxembourg adopts national filtering mechanism for foreign direct investments “likely to undermine security or public order”

The Luxembourg Parliament has adopted a law establishing a mechanism for the national screening of foreign direct investments likely to undermine security or public order. The Law implements Regulation (EU) 2019/452 establishing a framework for the screening of foreign direct investments into the Union, which contains essential elements of the framework for the screening of such investments by Member States and introduces co-operation at EU level in the field. 

The Law will have a significant impact on the timing and proceedings of in-scope M&A transactions.

Depending on the exemption of a second parliamentary vote and the date of publication of the Law, the new regime may still enter into force this Summer (1 August or 1 September, the latter being more likely).

Considering certain areas of uncertainty in the Law (e.g., its potentially wide scope), it is expected that the Ministry of the Economy will provide guidance to assist relevant entities in complying with the new framework.

13 June 2023: CSSF Thematic Review: Validation of Value-at-Risk models used by UCITS for global exposure calculation – Results

The CSSF has published the results of its thematic review into VaR models used by UCITS for the calculation of global exposure and more specifically the processes in place at the level of IFMs for the initial and ongoing validation of the VaR models. The thematic review was carried out on the basis a representative sample of 20 Luxembourg IFM managing Luxembourg UCITS that use the VaR for the calculation of the global exposure. 

26 June 2023: FATF audit on Luxembourg – initial feedback

The Financial Action Task Force (FATF) has released its initial feedback on the back of its recent visit to Luxembourg list. The FATF plenary assembly concluded that Luxembourg has achieved a high level of technical compliance with the FATF requirements and that its anti-money laundering and counter-terrorist financing regime works well. Therefore, Luxembourg has not been added to the FATF grey list. Certain recommendations for improvement will be published by the FATF in due course.

27 June 2023: Annex of Circular CSSF 22/822

The CSSF has released an updated Annex of Circular CSSF 22/822 covering:

  1. high-risk jurisdictions on which enhanced due diligence and, where appropriate, countermeasures are imposed;
  2. jurisdictions under increased monitoring of the FATF.

29 June 2023: FAQ regarding the AML/CFT Market Entry Form (Funds and IFMs)

The CSSF has published an update of the FAQ regarding the AML/CFT Market Entry Form for Funds and IFMs. Question 1 on when a Market Entry Form should be completed has been clarified.

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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