“Luxembourg has stolen a march on other fund domiciles”
Sébastien Danloy was recently appointed as RBC Dexia’s new Managing Director in Luxembourg. After gaining professional experience in Ireland, the UK and France, he came back to Luxembourg, where his career began. In an interview with LFF, he talked about the challenges for the Luxembourg fund industry and the direction RBC Dexia is taking.
LFF: What does your return to Luxembourg mean to you on the professional and the personal side?
SB: I am very happy to return to Luxembourg, where I began my career, because I am comforted by the high level of professionalism among all the players in the Luxembourg financial services market. I am also returning at an important and dynamic time for the Duchy, when it has a real opportunity to build on its success as an international fund centre, and this is obviously exciting for me as the Managing Director of RBC Dexia, as we are ideally placed to capitalize on these opportunities. On a more personal note, there are many places I recall fondly from my time here before and to see them again and to reconnect with the people and places from that time is a great pleasure for me. The places and the people may have changed, but there is still a local spirit that connects us all.
LFF: Does your appointment mean structural changes to the company?
SB: I would say that my appointment will mean changes locally, but any changes would be the result of listening long and hard to our clients and employees and seeing how we can improve the RBC Dexia experience for both of them. Structural changes aren’t really necessary – RBC Dexia has the model right – utilizing the highly-skilled local workforce in roles that really add value for our clients. What can always be improved is what we do with information we get from our clients and how we translate that into action that is to the benefit of all.
LFF: What are main activities of RBC Dexia in Luxembourg?
SB: RBC Dexia in Luxembourg provides an extensive range of products and services from global custody, to fund administration and shareholder services. Client surveys and industry ranking for our different core activities – fund administration, custodian bank and transfer agent - have positioned our bank as a major leader in the Luxembourg financial market.
LFF: Alfi recently criticised the new law on FATCA. What is your opinion on this subject? Will FATCA affect RBC Dexia’s business?
SB: FATCA will affect all financial services players around the world and RBC Dexia is not going to be immune to its impact. We have dedicated significant internal resources to assessing the impact it will have on us and our clients and we are liaising closely with all interested parties to make sure our views are heard. In itself FATCA is a laudable idea, the concern comes when you look at how it can be implemented pragmatically without creating too onerous a burden where it is not necessary.
LFF: What are the main advantages of Luxembourg as a fund market?
SB: Luxembourg has stolen a march on other fund domiciles because of its strong infrastructure, simple regulatory environment and the expertise of its work force. To that, one must add a close relationship between the industry, the regulator and the political environment. These qualities are not easy to replicate elsewhere. Other domiciles are still playing catch-up. This capacity to adapt with the increasing complexities of the asset management sector is Luxembourg’s core strength, and it is important for the country to ensure it maintains its edge in terms of manpower and skills.
The new regulatory environment, for example, is an opportunity for Luxembourg, as it can build on its extensive expertise in UCITS in particular to strengthen its leading position as a fund domicile. Asset managers appreciate the country’s readiness to deal with new regulation, and those planning new launches in the coming year will naturally look to Luxembourg for clarity.
Overall, I think that Luxembourg’s intellectual capital will be its key strength going forward. The asset servicing industry as a whole is moving up the value chain with regards to its clients and RBC Dexia has relied heavily on the expertise of its employees in Luxembourg to redefine itself as more of a partner/consultant than a mere low-margin service provider.
LFF: Where are the main challenges in the future to rest competitive ?
SB: In our view, the way forward for the Duchy is to constantly move up the value chain if it wants to remain ahead of the competition. Luxembourg really needs to focus on its added value, the capacity to take on clients’ middle office functions and support their distribution activities for example, which requires more intellectual fire-power.
Client service is equally crucial. We’ve found that clients are more willing to be domiciled where they get the best service, and it is certainly a model that we are focusing on at RBC Dexia, with Luxembourg being the main client service centre for clients based all around Europe.
Luxembourg has a great track record for simplifying things for investors. The PSF status for example was a great move on the part of the CSSF, and the country has great datacenters that give players in the market enormous confidence. The future of Luxembourg is more of the same.