Luxembourg bankers first to sign wealth management charter
The Private Banking Group, Luxembourg (PBGL) and the Luxembourg Bankers’ Association (ABBL) are the first organisations to have signed a Private Wealth Management Charter of Quality devised by the International Capital Market Association (ICMA).
The ICMA Charter, which was developed in cooperation with financial sector organisations from several European countries, sets out guiding principles for the private wealth management industry in a straightforward manner which clients will find easy to understand.
The Charter is designed to be consistent with relevant regulation at European Union and national level, and to complement principles such as the Wolfsberg Principles on Anti Money Laundering and the global recommendations of the Financial Action Task Force.
The charter is founded on three principles that ICMA and the signatory associations believe to be of paramount importance to the nature of business relationships with clients, namely:
- Integrity: in business relationships, of markets, financial products and services, and of staff;
- Transparency: towards clients and regarding the regulatory environment;
- Professionalism: regarding the primacy of clients’ legitimate interests and efficiency.
“Nothing in that Charter is actually new, there is nothing that is not already foreseen in our laws and regulations”, commented Jean Guill, director general of the Luxembourg financial sector supervisory authority CSSF, at the signing ceremony. Nevertheless, he stressed, this signing and the fact that the Luxembourg Bankers’ Association is the first one to underwrite it with ICMA, is an important step forward, a testimony of the evolution of private banking in Luxembourg.
“The ICMA Charter is the first initiative of its kind, where the private wealth management industry has come together to commit to voluntary common standards of quality, compliance and good market practice,” said Luc Rodesch, Head of the ABBL Private Banking Group in Luxembourg.
The Luxembourg regulator not only supports the initiative but insists that all players in the wealth management area, be they banks or other forms of management company, sign the Charter. “We shall verify that its implementation is effective and does not stop at lip service,” added Jean Guill.
Jean Guill also announced that the CSSF is about to issue a major circular on internal governance in banks and investment institutions, which will underpin the Charter initiative. The circular provides that compliance and internal audit staff be called upon to check and report on their company’s compliance with the rules laid down in this Charter - and elsewhere. JJP