In a move aimed at simplifying the administrative burden in the financial and insurance sectors, the Luxembourg Minister of Finance filed draft law No. 7761 (the “Draft Law”) with the Luxembourg Parliament (Chambre des Députés) on 2 February 2021. The Draft Law, if adopted, will represent a major modernisation in the procedure for the granting and revoking of licenses to companies operating within the above-mentioned sectors.
Currently, a number of sectoral laws empower the Minister of Finance to grant or withdraw a licence to a regulated entity. The main purpose of the Draft Law is to transfer that power to the CSSF or to the Commissariat aux Assurances as applicable, and to do so by amending the various sectoral laws.
Why is this change important?
The Draft Law, if adopted, shall harmonise the approach regarding the granting of licenses; pursuant to the current legislation, the CSSF is already empowered to grant and withdraw licenses to investment funds and their managers as well as to statutory auditors/audit firms. Therefore, it is only logical that this more streamlined procedure be rolled out to other market players such as payment service providers, electronic money institutions and securitisation companies, to name a few.
This Draft Law does not come as a surprise. Indeed, this is consistent with the general trend in European Union law, to delegate licensing powers to the national competent authorities in charge of prudential supervision. This is undoubtedly the right step for Luxembourg, a leading financial centre, to remain at the forefront of legal and regulatory developments.