03 October 2023



The CSSF has published its Annual Report 2022 which provides an overview of the CSSF’s activities and initiatives in 2022. AML remains a priority for the CSSF.


Luxembourg Market Update:

Aggregate assets in Luxembourg-domiciled reserved alternative investment funds increased by 38.6% in 2022 to $458.4bn, according to the latest Monterey Insight Luxembourg Fund Report. Assets of other categories of unregulated funds, limited partnerships and Soparfis, which mostly invest in property assets, increased by 45.0% to $681.4bn, during a year in which the assets of regulated funds declined. Private debt, private equity and venture capital, and property and real estate saw the greatest inflows among non-regulated funds.

The aggregate assets of the 10,078 Luxembourg-domiciled UCITS funds totalled €4,230bn at the end of June, with net outflows in the second quarter amounting to €35.78bn, while the assets of the grand duchy's 4,145 alternative investment funds stood at €966bn, bolstered by net inflows of €9.32bn, according to the European Fund and Asset Management Association. The next largest European domicile for funds was Ireland with a total of €2,976bn in 5,306 UCITS funds and €843bn in 3,355 AIFs. The aggregate assets of Europe-domiciled investment funds increased by 2% during the second quarter to €19.8trn, according to EFAMA.

Regulatory Developments in and beyond Luxembourg:

18 July 2023: Final report on the ESMA Common Supervisory Action on valuation

The CSSF has published its feedback report on the Common Supervisory Action (CSA) on valuation conducted under the initiative of the ESMA. This report follows ESMA’s Final Report on the 2022 CSA on valuation.

In its CSA, the CSSF conducted a questionnaire-based review, on a sample of 30 Luxembourg-domiciled IFMs managing Luxembourg- and foreign-domiciled UCITS/open-ended AIFs. The resulting analysis was communicated to the ESMA. This analysis was complemented in July 2022, in the context of the Russia-Ukraine crisis, by a CSSF supervisory exercise targeting specifically the valuation practices in a stressed environment with regards to asset liquidity.

The CSSF expects IFMs to consider the observations and recommendations evidenced in the CSA on valuation, in their ongoing assessment of their valuation framework.

27 July 2023: ESMA report assessing the implementation of SRD 2

The European Securities and Markets Authority (ESMA), jointly with the European Banking Authority (EBA), published a report assessing the implementation of the Shareholder Rights Directive 2 (SRD 2).

This assessment, carried out in response to a European Commission’s request, identifies areas for further progress and provides detailed suggestions for policy action in relation to the SRD 2’s effectiveness, difficulties in practical application and the appropriateness of the scope of application, including the following:

  • For proxy advisors the current framework has proved robust overall. Still, certain improvements could be put in place, for example in connection to conflicts of interest. In addition, ESMA proposes the introduction of a registration mechanism for proxy advisors at EU level.
  • For the investment chain, ESMA highlights the importance of making further efforts in the direction of a common definition of the term “shareholder” in line with Action 12 of the Commission’s CMU Action Plan. Several additional technical improvements to streamline communication along the investment chain are also proposed, along with a call for increased transparency in relation to disclosing charges applied by intermediaries.

31 July 2023: EC adopts the European Sustainability Reporting Standards (ESRS)

The European Commission (EC) has adopted the European Sustainability Reporting Standards (ESRS). These reporting standards, to be used by all companies subject to the Corporate Sustainability Reporting Directive (CSRD) starting in 2025 based on the financial data from the 2024 financial year, represent a step forward in the transition to a sustainable EU economy. The standards encompass the full range of environmental, social, and governance considerations while ensuring a high degree of interoperability between EU and global reporting standards.

The related Q&A provide additional information and guidance for companies subject to CSRD.

25 August 2023: CSSF publishes its Annual Report for 2022

The CSSF has published its Annual Report 2022 which provides an overview of the CSSF’s activities and initiatives in 2022.

AML remains a priority for the CSSF. Supervisory activities are undertaken on a risk-based approach which is determined by the data collected in the annual AML/CFT questionnaire, self-assessment, as well as the external AML report. The CSSF performed off-site ad on-site inspections. A dedicated team of four agents within the “Supervision of investment firms” department deals with the aspects of the off-site AML/CFT supervision of investment firms. In total, 22 observation letters and two injunction letters were sent in 2022 with respect to AML/CFT. They were issued following, in particular, (i) shortcomings identified in the 2021 closing reports (inadequate frequency of name screening against the lists of financial sanctions, too weak definition of the entity’s risk appetite, etc.),  (ii) weaknesses identified through the responses to the AML/CFT questionnaire (doubts regarding the existence of a transaction monitoring system, etc.) and (iii) material deficiencies detected in the AML/CFT procedures (insufficiencies as regards the obligations with respect to adequate internal control or the obligations to cooperate with the CSSF.

6 September 2023: CSSF Communiqué on the launch of ESMA Common Supervisory Action (CSA) on sustainability risks and disclosures

The CSSF has informed the market that, On 6 July 2023 the European Securities and Markets Authority (ESMA) announced the launch of a Common Supervisory Action (CSA) with National Competent Authorities (NCAs) across the European Union on the integration of sustainability risks and disclosures.

The aim of the CSA is to investigate how UCITS Managers and AIFMs comply with the relevant provisions in the Sustainable Finance Disclosure Regulation, the Taxonomy Regulation and relevant implementing measures, including the relevant provisions in the UCITS and AIFMD implementing acts on the integration of sustainability risks. The CSA will also relate to the principles of the ESMA Supervisory Briefing on sustainability risks and disclosures in the area of investment management published in May 2022. The CSA is performed based on a common methodology developed by ESMA.

In this context, on 29 August 2023 the CSSF contacted the Luxembourg-based UCITS Managers and AIFMs in scope of this CSA. The UCITS Managers and AIFMs that did not receive an email from the CSSF on 29 August 2023 on this subject matter are not concerned by this exercise.

The CSA is a two-stage process where:

  • In the first stage, NCAs will request UCITS Managers and AIFMs to complete a questionnaire focusing more closely on greenwashing risks;
  • In the second stage, NCAs will request UCITS Managers and AIFMs to complete a questionnaire dedicated to the integration of sustainability risks and factors in the organisational arrangements of UCITS Managers and AIFMs and to the transparency disclosures at IFM and product level.

Technical information and deadlines will be shared with the selected entities on a bilateral basis.

14 September 2023: SFDR Consultation and Review by European Commission

The Commission has launched a far-reaching consultation and review of SFDR, long expected by the industry. The Commission invites responses until 15 December 2023 through two questionnaires: a public one, aimed at a broad range of stakeholders and a targeted one, aimed at industry bodies and firms familiar with SFDR and the EU’s sustainable framework.

The public consultation focuses on how SFDR is working today, and the issues firms have experienced in implementing it, while the targeted consultation explores specific aspects of the regime and its possible future development. The Commission seeks notably feedback on potential changes to the disclosure regime and the possibility of establishing a new labelling system for financial products. The consultation results will inform the Commission on the application and scope of SFDR and may lead to legislative proposals to amend SFDR.

15 September 2023: CSSF publishes Circular 23/840 on the application of the ESMA Guidelines on MiFID II product governance

The CSSF has published the ESMA guidelines to clarify the application of certain aspects of the MiFID II product governance requirements in order to ensure the common, uniform, and consistent application of Articles 9(3), 16(3), 16(6), 24(1) and 24(2) of MiFID II. The Guidelines and this circular apply from 3 October 2023 onwards.

22 September 2023: New communication means for AIFM reporting

The CSSF has issued a Communiqué for the attention of alternative investment fund managers (AIFMs) regarding the CSSF’s work “in codesign mode” with pilot entities from the industry to allow managers of alternative investment funds to transmit their AIFM reporting through an API solution (S3 technology). As of 2 November 2023, alternative investment fund managers will be able to transmit their AIFM reporting through this new solution.

A dedicated webinar will be held in October to present the corresponding details. Please note that transmission of AIFM reporting through external transmission channels will remain possible until 30 June 2024.

27 September 2023: FATF publishes evaluation report on Luxembourg’s AML-CTF framework

The Financial Action Task Force's (FATF) report indicates that Luxembourg has a “solid anti-money laundering and counter-terrorist financing (AML-CTF) framework and a good understanding of its money laundering and terrorist financing risks.” It noted some room for improvement regarding AML investigations and prosecutions, asset recovery and supervision of non-profit organisations and some non-financial sectors. The report praised Luxembourg’s good understanding of its money laundering and terrorist financing risks and the country's framework for addressing them. The grand duchy was found to be technically compliant in terms of its AML legislation in 39 of the 40 areas on which the FATF has issued recommendations to its members.


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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