Circulaire CSSF 23/841

The purpose of this circular is to inform about the application by the CSSF of the ESMA Guidelines on certain aspects of the remuneration requirements of Directive MiFID II (ESMA35-43-3565), published on 3 April 2023. The CSSF has integrated these Guidelines into its administrative practice and regulatory approach in order to promote convergence in supervision in this area at the European level. All entities within the scope of this circular are required to comply with it.
This circular applies to:
– Investment firms, as defined in point 9) of Article 1 of the amended law of 5 April 1993 on the financial sector (LFS);
– Credit institutions, as defined in point 12) of Article 1 of the LFS, when they provide investment services and activities within the meaning of point 30) of Article 1 of the LFS;
– Investment firms and credit institutions, when they sell or advise clients in relation to structured deposits within the meaning of point 7quater) of Article 1 of the LFS;
– UCITS management companies, as defined in point 31) of Article 1 of the LFS, when they provide investment services or ancillary services as listed in Article 101(3) of the law of 17 December 2010 on undertakings for collective investment (UCI Law) as amended;
– Managers of alternative investment funds, as defined in point 46) of Article 1 of the law of 12 July 2013 on AIFMs (AIFM Law), when they provide portfolio management services or ancillary services as listed in Article 5(4) of the AIFM Law.
The Guidelines were issued by ESMA in accordance with Article 16(1) of the ESMA Regulation. The Guidelines aim to ensure common, uniform, and consistent application of:
– The remuneration requirements set out in Article 27 of the MiFID II Delegated Regulation;
– The requirements on conflicts of interest in the field of remuneration set out in Articles 16(3) and 23 of MiFID II, as well as Article 34 of the MiFID II Delegated Regulation; and
– The conduct rules set out in Article 24(1) and (10) of MiFID II.
The Guidelines also clarify the governance requirements in the field of remuneration under Article 9(3) of MiFID II. The Guidelines aim to promote greater convergence in the interpretation and supervision of the requirements of MiFID II, both in terms of remuneration and conflicts of interest and conduct rules in the field of remuneration, by focusing on a number of important issues and thereby strengthening the value of the existing standards. Furthermore, these Guidelines repeal the ESMA Guidelines on remuneration policies and practices (MiFID Directive) (ESMA/2013/606).
Finally, CSSF Circular 14/585 is repealed and Annex V to CSSF Circular 07/307 is deleted.