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Pragmatic regulation

LFF put online Jean Guill’s interview.


The title sounds interesting: “reinforcing controls in entities”, but when looking carefully he misses the essential.


I have three observations:


1. He does not talk again of the “faithful transposition” of UCITS directive but of “misunderstandings on the applicable provisions in the various countries”. I love such wooden language.


2. He does not speak about the influence of the professionals on the regulator beyond what is normal because it is practically an assent that professionals state for every regulation.

I will quote again Rafik Fischer and the CSSF itself:


The Luxembourg Investment Fund Industry has regularly had a very close and direct say on the evolution of the Luxembourg prudential regulatory environment governing the collective Investment Industry (...) This influence has been exerted directly and indirectly by the lobbying initiatives taken on the level of the different professional associations, be it ALFI or ABBL , but also and more importantly, trough a direct association with the Luxembourg Supervisory Authorities by means of a number of standing committees" (Rafik Fischer, Vice Chairman, ALFI, in 2005)


This is confirmed by the CSSF: "The internal committees assist the CSSF in the analysis of the development of the different financial sector segments, give their advice on any question relating to their activities and participate in the drawing-up and the interpretation of regulations relating to their specific field."


3. There is nothing on the Luxembourg strangeness which gives to the regulator a role in the promotion of the financial center. This had been pointed out with relevance by the Lucien Thiel’s Commission:


« le rôle de la CSSF, défini à l’époque comme celui non seulement d’un contrôleur du secteur financier mais encore d’un promoteur de la place doit être revu afin d’éviter tout équivoque sur sa mission essentielle qui est celle de la surveillance prudentielle » (free translation : “the role of the CSSF, defined at the time as both a controller of the financial sector and as a promoter of the financial center, must be re-examined in order to avoid any ambiguity on its essential mission which is that of the prudential monitoring”) (In report « Vers un nouveau modèle de croissance », 23 March 2009, page 13)


 The Law of 23 December 1998 establishing a financial sector supervisory commission (“Commission de surveillance du secteur financier”), as amended, states :


 Art. 3. The CSSF shall:

(a) examine all requests from undertakings or persons seeking to establish themselves in the Grand Duchy of Luxembourg to engage in one or more of the activities enumerated in Article 2 which require authorisation from the Minister responsible for the CSSF;

(b) carry out prudential supervision of undertakings and persons coming under its authority in accordance with the laws and regulations governing such supervision;

(c) coordinate the implementation of government initiatives and measures aimed at achieving an orderly expansion of the activities of the financial sector in the Grand Duchy of Luxembourg;

(d) monitor dossiers and participate in negotiations at a Community and international level relating to problems affecting the financial sector;

(e) present to the Government any suggestions likely to improve the financial sector’s legislative and regulatory environment;

(f) examine any other question relating to financial activities which the Minister responsible for the CSSF might submit to it.


You know what: whereas the CSSF is involved in the promotion of the financial center and carry out prudential supervision of undertakings and persons coming under its authority in accordance with the laws and regulations governing such supervision in the framework of what professionals that have a very close and direct say have decided, Investor protection is not listed clearly among the missions.







17:57 Posted in Luxembourg | Permalink | Comments (0)

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