News - 31.03.2020

Luxembourg regulators respond to Covid-19 crisis

  • The Financial Centre

The two regulators of the financial sector in Luxembourg, the CSSF and the CAA, have issued clarifications and new measures to support and clarify a number of points for regulated entities in their day-to-day management of the ongoing coronavirus crisis.

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The two regulators of the financial sector in Luxembourg, the CSSF and the CAA, have issued guidelines and new measures to support and clarify concerns for regulated entities in their daily activities during the coronavirus crisis, given the anticipated impact on human capital, the economy and the financial markets at large.

The first clarifications were issued on 2nd of March by the CSSF focusing on business continuity, the protection of staff by increased remote working, and waivers to ensure quick implementation of necessary IT-measures by regulated entities. Similarly, on the 22nd of March the CSSF urged all supervised entities to immediately review their organisational setup to ensure the temporary increased remote working conditions.

On the 12th of March, the CSSF outlined its responsibility in the context of the coronavirus, and later also clarified its own operational changes: the regulator remains operational but its offices are closed to external visits and all communication is to be effected digitally.

Thereafter, a Frequently Asked Questions (FAQ) document was issued by the CSSF, with updates on the 3rd of March, as well as on the 17th, 20th, 23rd, 26th, 27th and 30th of March. This wide ranging FAQ was released to answer questions to all regulated entities, with topics ranging from IT security conditions for remote access, temporary swing pricing allowances, waivers of authorisation for cloud-based activities, as well as reporting deadline extensions and the adoption of European level measures, such as the European Central Bank’s prudential ratios and regulatory deadlines for less significant institutions, and the European Banking Authorities’ increase of contactless and pin-less payment thresholds.

Further measures taken by the CSSF have included a permitted delay of a number of regulatory reporting (after seeking permission from the regulator), a permitted delay to long form reports where necessary, and a new complaints policy which is to be digital-only.

The Luxembourg insurance regulator, the CAA, has also taken similar measures as at the 17th of March: closing the offices to the public and operating on a digital-only basis, with increased remote-working capabilities. Furthermore, a number of deadline extensions have been granted as regards to dispute resolution and out-of-court settlement deadlines.