The new Markets in Financial Instruments (MiFID) Act, which transposes the Markets in Financial Instruments Directive and implements the EU Markets in Financial Instruments Regulation, was recently voted into law. Most issues relating to markets in financial instruments are covered by the first part of the act, while the provision of investment services will continue to be governed by the Financial Sector Act, as amended by the second part of the MiFID Act.
Following the adoption of Bill of Law 7022, the new Act on Market Abuse recently entered into force. The act significantly increases the administrative and criminal penalties for infringements of market abuse provisions and designates the Luxembourg financial sector regulator as the competent authority for the purposes of the EU Market Abuse Regulation. It also extends the definition of 'regulated information' provided for in the Act on Transparency Requirements for Issuers.
The Luxembourg Stock Exchange (LuxSE) recently introduced a new specific platform for green financial instruments: the Luxembourg Green Exchange (LGX). Although joining the LGX is optional and green securities can be listed on the LuxSE and recognised as green regardless of whether the issuer chooses to join the LGX, having securities admitted to the LGX will increase investor confidence as to their green nature.
The EU Market Abuse Regulation recently came into force in Luxembourg and a new market abuse regime affecting listed companies has been implemented. In addition, a wider set of rules covering the disclosure of inside information, insider list manager transactions and modifications relating to multilateral trading facility (MTF) platforms – including the Luxembourg Euro MTF market – have been introduced.
Updated Luxembourg Stock Exchange (LuxSE) rules and regulations came into force in January 2016 and the LuxSE recently published frequently asked questions (FAQs) regarding the Euro MTF Market rules. The FAQs include information on approvals and the requirements for the different types of security generally issued. They also provide support to practitioners in regards to prospectus approvals and the Euro MTF market listing process.
The Luxembourg Stock Exchange recently published new rules which are now in force and which replace the previous set of rules. Among other things, references to obsolete regulations have been deleted and discrepancies in terminology have been corrected, while certain requirements have been relaxed in accordance with EU regulations.
The EU Capital Requirements Directive has been transposed into Luxembourg law. The implementing act also amended the laws governing the financial sector, the CSSF (the Luxembourg financial sector regulator) and alternative investment fund managers. Among other things, key definitions have been introduced to pave the way for implementation of the EU supervisory framework for credit institutions and investment firms.
Persons exercising key functions in investment firms are now subject to specific approval by the Luxembourg financial regulator, the Commission de Surveillance du Secteur Financier (CSSF). The CSSF recently published guidelines on the new prudential approval procedure, which applies to directors, authorised managers and persons in charge of internal control functions.
The regulatory authority of the financial sector recently issued a press release stating that any legal person established in Luxembourg that qualifies as an alternative investment fund manager (AIFM) must perform a self-assessment in order to determine whether it is an internal or external AIFM and whether it must be registered with or authorised by the authority.
The law implementing the EU Alternative Investment Fund Managers Directive in Luxembourg recently entered into force. Enhancing Luxembourg's attractiveness for alternative investment funds, the law offers a true alternative to the ever-popular English limited partnership by modernising the rules on common limited partnerships and introducing a new category of financial sector professional.
Until the entry into force of a new law transposing EU Directive 2010/78/EC, investment advisers of undertakings for collective investment established in Luxembourg were expressly exempt from the scope of the Financial Sector Act. The new law now requires investment advisers to apply for a licence to carry out their activities under the act.
A new law introducing a legal regime for dematerialised securities recently entered into force. Inspired by similar regimes in Belgium, Switzerland and France, the law allows securities to be issued in or converted into entirely dematerialised form. The law constitutes a considerable step forward in the establishment of a safe and modern legal framework that facilitates the international transfer of securities.
The European Securities and Markets Authority (ESMA) recently affirmed its understanding of Article 50(2)(a) of the EU Undertakings for Collective Investment in Transferable Securities Directive - the article commonly referred to as the 'trash bucket'. The opinion provides clarity for the Luxembourg supervisory authority, which has adopted the ESMA's position and provided guidance on compliance.
The Commission de Surveillance du Secteur Financier (CSSF), the Luxembourg supervisory authority, recently published a press release on the promotion of Luxembourg undertakings for collective investment in transferable securities (UCITS). The CSSF previously required each Luxembourg UCITS to identify a promoter out of consideration for investor protection. After much debate, this requirement has been abandoned.
A draft bill was published recently with the main purpose of transposing into Luxembourg law the EU Alternative Investment Fund Managers Directive. The bill also introduces a new category of financial sector professionals to the law on the financial sector. Until the bill is fully adopted, amendments may still be proposed by various bodies that advise on the proposed law.
The new Prospectus Revision Law implements EU Directive 2010/73/EC, which amends both the EU Prospectus Directive concerning the prospectus to be published when securities are offered to the public or admitted to trading and EU Directive 2004/109/EC on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market.
The Commission de Surveillance du Secteur Financier, Luxembourg's financial regulator, has published a statement on Islamic debt securities that stresses Luxembourg's desire to provide further clarity on certain rules applicable to sukuk. The move is a further boost to Luxembourg's status as a global hub for Islamic finance.