JavaScript is turned off in your web browser.
Turn it on to take full advantage of this site, then refresh the page.
The financial services regulations relating to outsourcing by Luxembourg-headquartered financial institutions have been significantly simplified by the introduction of the Commission de Surveillance du Secteur Financier (CSSF) outsourcing circular CSSF 22/806 (Outsourcing Circular).
The Outsourcing Circular, which came into force on June 30, 2022, consolidated Luxembourg’s extensive network of regulations into a single set of harmonized rules that align in large part with the European Banking Authority’s revised guidelines on outsourcing arrangements (EBA Guidelines). The regulations were previously spread across multiple individual circulars, many of which have either been amended or repealed.
While the EBA Guidelines only apply to credit institutions, investment firms, and payment and electronic money institutions, the CSSF chose to extend the Outsourcing Circular’s scope of application, with a view to promoting convergence at national level. The Outsourcing Circular also applies to other professionals within the financial services sector and POST Luxembourg (the government-owned mail and communications company) and, in the context of information technology outsourcings only, other entities such as investment fund managers, market operators operating a trading venue, central securities depositories, and others (In-Scope Entities).
The Outsourcing Circular came into force on June 30, 2022, and was applicable immediately in respect of new outsourcing arrangements.
In-Scope Entities are required to update their existing outsourcing arrangements to ensure compliance with the Outsourcing Circular by the earlier of the first renewal date or December 31, 2022. If this deadline is likely to be missed, the In-Scope Entity must inform its competent authority in a timely manner, providing the measures planned to complete the review or the possible exit strategy.
Partner
Associate
Copyright © 2022 Morgan, Lewis & Bockius LLP. All rights reserved.