Circular CSSF 23/829

On 19 January 2023, the Commission de Surveillance du Secteur Financier (CSSF) published Circular CSSF 23/829, to inform supervised entities about the application of the EBA Guidelines on the criteria for the exemption of investment firms from liquidity requirements in accordance with Article 43(4) of Regulation (EU) 2019/2033 (EBA/GL/2022/10), published on 29 July 2022. „Consequently, the CSSF has integrated the Guidelines into its administrative practice and regulatory approach with a view to promote supervisory convergence in this field at European level“.
The aforementioned Guidelines were issued by the European Banking Authority (EBA) in accordance with Article 43(4) of Regulation (EU) 2019/2033 (the Investment Firms Regulation – IFR) in the context of the mandatory liquidity requirements that apply under Article 43 of the IFR. The Guidelines specify that small and non-interconnected investment firms as defined in Article 12(1) IFR as In-Scope Entities are eligible for the exemption if they fulfill the criteria set out in sections 4.1 and 4.2 and point 20 of section 4.3 of the Guidelines.
„In-Scope Entities that wish to be exempted from these liquidity requirements must receive prior authorisation from the CSSF. The CSSF performs a case-by-case assessment in accordance with sections 4.3 and 4.4 of the Guidelines, taking into account In-Scope Entities’ risks to its clients and the firm itself, the nature, scope and complexity of its activities and the types of activities performed by the firm and, if available, any outcome of the supervisory review and evaluation carried out in accordance with Part III, Chapter 4, Section 4 of the Law of 5 April 1993 on the financial sector as well as any other relevant information.
In-Scope Entities shall submit their authorisation request by email to their usual point of contact at the CSSF, with copy to ei@cssf.lu“. The Guidelines are attached to this event.
This circular shall apply with immediate effect.