Circulaire CSSF-CPDI 23/34

Circular CSSF-CPDI 23/34 has been issued to modify the method for calculating ex-ante contributions laid down in Circular CSSF-CPDI 20/21.
The purpose of the circular is to adjust the contributions to be paid in cases where deposit growth results from mergers between member institutions or from transfers of liabilities or similar operations between member institutions, whereas contributions have been paid in the past of the protection of such transferred deposits.
The adjustment consists of calculating the contribution of the member institution whose deposits have been transferred to another member institution, without applying a floor at zero. This amount, which is generally negative due to the decline in the volume of covered deposits, is used to reduce the contributions of the absorbing member institution(s).
The present circular relies on articles 166(2), 179, 180, 182, 187 and 189 of the law of 18 December 2015 on the failure of credit institutions and certain investment firms (BRRD Law). The circular introduces two modifications of Circular CSSF-CPDI 20/21 in Annexe 1 of the present circular:
– In formula (4), the sum shall run over all institutions affiliated with the
FGDL on 1 January of year j or on 1 January of year j-1;
– In formula (6), the amount D*j-2 shall be defined as the volume of covered deposits as at 31 December of year j-2 participating in the FGDL at the beginning of year j or having been merged into another member during the year j-1.
Finally, 2 new paragraphs 12 and 13 are added to Circular CSSF-CPDI 20/21:
Paragraph 12 explains the calculation for a a member institution whiich has received eligible deposits from a member institution in the context of a merger, a transfer of liabilities or a similar contractual operation during the year j-1, or if an institution no longer exists on 31 December of year j-1.
Paragraph 13 explains that in cases where member institutions obtain qualified deposits from fellow member institutions through mergers, liability transfers, or comparable contractual transactions, they are required to report the sum of the received qualified deposits and the resulting augmentation of their insured deposits.
A consolidated version of Circular CSSF-CPDI 20/21 is attached as Annex 1 to the present Circular CSSF-CPDI 23/34.