Key Facts

The COVID-19 pandemic and the Brexit put their stamp on 2020. However, these events did not stop the CSSF from continuing to invest in order to better meet the expectations of its stakeholders, nor the numerous regulatory works induced by a constantly evolving framework.

COVID-19

  • At internal level:
    • CSSF agents shifting to remote working as of 16 March 2020.
    • Total business continuity thanks to investments in ICT within the framework of the CSSF 4.0 transformation strategy.
  • At supervisory level:
    • The CSSF was one of the first supervisory authorities to encourage the entities under its supervision to activate their business continuity plan and to shift to teleworking.
    • Making use, together with the European Supervisory Authorities, of the flexibility allowed by the regulatory framework in order not to impose additional burden on the supervised entities at the height of the crisis.
    • Closer relations with the industry to better assess and manage the risks incurred in particular as regards liquidity.

Brexit

  • Support to the stakeholders concerned to avoid a cliff effect at the end of the transitional period.
  • Publication of CSSF Regulation No 20-02, amended by CSSF Regulation No 20-09 recognising the equivalence of the United Kingdom at the end of the transitional period, under the national third-country MiFID II/MiFIR regime.

Investment funds

  • Implementation of the Environmental, Social, and Corporate Governance (ESG)/Sustainable Finance Disclosure Regulation (SFDR) requirements.
  • Launch of the ESMA Data Quality Engagement Framework.
  • Work on the recast of the AIFMD.
  • Work on liquidity risk based on IOSCO/FSB initiatives, ESBR recommendations and ESMA actions.

Single Supervisory Mechanism

  • Work on the circular on outsourcing.

Credit institutions

  • Preparations for the authorisation as central securities depository of a major player of the financial sector.
  • Significant increase in the need for credit value adjustments due to the forward-looking effect introduced in the IFRS accounting rules.
  • Establishment, by the CSSF as manager, of the central electronic data retrieval system concerning payment and banking accounts identified by IBAN and safe-deposit boxes held by credit institutions.
  • Update of the EBA’s ad hoc impact study on the implementation of Basel III in the EU as a response to the European Commission’s call for advice. Reaffirmation of the support for the full implementation of the final Basel III standards in the EU.

Fonds de Garantie des Dépôts Luxembourg

  • Implementation of a fairer calculation method for FGDL contributions.

Firms providing investment services

  • Preparatory work aiming at introducing a new regulatory framework following the publication of the Investment Firm Directive (IFD) and the Investment Firm Regulation (IFR).
  • Recognition by the CSSF of the equivalence under Article 32-1 of the LFS (national third-country MiFID II/MiFIR regime) of the regime of six countries (Hong Kong, Singapore, United States, Canada, Switzerland and Japan).

Innovation

  • Announcement of the “digital finance package” of the European Commission.

Payments

  • Obligation for payment service providers (PSPs) with online payment accounts to comply with the obligations laid down in Regulation (EU) No 2018/389 (SCA) as at 31 December 2020.

Support PFS

  • Definition of a new CSSF strategy for IT risk supervision.
  • Work on digital resilience made necessary by the growing dependency of the financial sector on IT systems. (cf. CSSF Regulation No 20-04, Circular CSSF 20/750, Digital Operational Resilience Act (DORA), draft recast of the directive on security of network and IT systems (Directive NIS 2)).
  • Implementation of the security rules of the Payment Services Directive (PSD2).

Specialised PFS 

  • Elaboration of a sub-sector risk assessment on Trust or Company Service Providers (TCSP).

Financial markets

  • Introduction of the e-prospectus.

On-site inspections

  • Harmonisation of the On-site inspections (OSI) and Internal model investigations (IMI) at the level of the European Central Bank.
  • Reorganisation of the on-site inspections via lean management projects and the release of the monitoring tool Pentana.

Fight against money laundering and terrorist financing (AML/CFT)

  • Preparation of the FATF’s visit.
  • Regulatory work:
    • updates of CSSF Regulation No 12-02, publication of Circulars CSSF 20/740 and 17/650.
    • participation in the drafting/review of new AML/CFT laws and regulations.
    • participation in the drafting of the second national ML/TF risk assessment report.
  • Entry into force of the Virtual Asset Providers (VASP) AML regulations.

Consumer protection

  • Increased vigilance as regards fraud risks to which the consumers are more and more exposed on the Internet.
  • Financial education:
    • Launch of a Lëtzfin Facebook page.

CSSF 4.0 Transformation strategy

  • Digitalisation
    • Deployment in “agile” mode of digital solutions for internal and external users aiming at improving the “collaborative” offer of the CSSF: e-Prospectus, eDesk enrichment, Register of bank accounts, CSSF.lu website, …
    • Implementation of new tools to support the CSSF activity: e-Badging, e-Learning platform, Link-up internal digital magazine, secure remote access to the CSSF environment, Outlook, skype for business, …
  • Training:
    • Work on the implementation of a digital curriculum vitae.
    • Development of e-learning content.
  • Process review:
    • 27 lean management projects completed.

Annual Report 2020

Annual Report 2020

Find out more about the issues that concerned the CSSF in the financial year 2020 and on which it took action by downloading its annual report.
Download the 2020 annual report