Commission de Surveillance du Secteur Financier

History

The CSSF took over the duties of the former Commissariat aux Bourses and of the Institut Monétaire Luxembourgeois (IML), which on 1 June 1998, became the Banque centrale du Luxembourg (BCL).

Structure

General organisation

Beside the Executive board, the CSSF consists of:

• Executive Board secretariat
• General secretariat
• PFS application guidance and regulation
• Legal department
• On-site inspection
• Public oversight of the audit profession
• Accounting, auditing and transparency
• UCI departments
• Supervision of specialised PFS
• Supervision of banks
• Single Supervisory Mechanism (SSM)
• Depositor and Investor Protection
• Supervision of securities markets departments
• Supervision of investment firms
• Innovation, payments, markets infrastructures and governance
• Supervision of information systems and support PFS
• Personnel, administration and finance
• Information systems of the CSSF (IT)
• Resolution

Responsibilities

Supervision

The CSSF supervision of the financial sector aims at:

• Promotion of a considered and prudent business policy in accordance with regulatory requirements
• Protection of the financial stability of the regulated entities and the financial sector as a whole
• Monitoring the quality of the organizational and internal control systems
• Strengthening the quality of risk management The CSSF monitors all financial activities in Luxembourg requiring the approval of the Minister responsible for the CSSF. It believes that it is in the public interest to ensure (a) that the laws and ordinances are enforced on the financial sector and (b) that international conventions and EU directives in the areas under its responsibility are implemented. The CSSF is authorized to demand all information needed to perform its duties from the companies under its supervision. The CSSF takes care of negotiations about the financial sector and coordinates the implementation of government measures whenever there is an expansion of the activities of the financial sector at local or international level.

Public auditor oversight

The CSSF is the public auditor oversight. In this regard, the CSSF is thus responsible for the granting of the professional qualifications of the "Independent Auditor" (auditors) and "cabinet de Revision" (audit) for the approval and registration of statutory auditors and audit firms. The CSSF is also responsible for the implementation of auditing standards and professional ethical standards and internal quality control of audit firms and approvals for continuing education.

Investor protection

The CSSF is directly responsible for investor protection related queries. As part of the FIN-NET program, the CSSF is the sole recourse for investors who seek compensation or handling of complaints. Unlike some jurisdictions, there is no separate or independent ombudsman. There have been a number of high-profile cases, including Madoff, where the CSSF's ability to handle customer complaints has come into question. To date, the general response has been unsatisfactory and there are increasing concerns over the capabilities of the CSSF to carry out their duties effectively. With a prime role to market the financial sector, a direct conflict is often observed between protecting investors and regulating/promoting an orderly financial market. LuxAlpha (Madoff), Landsbanki, and others have failed to recover any investor monies, despite investor outcry and complaints.{{Cite news|url=https://www.ft.com/content/0b5f104f-80c5-462f-acd5-4744b5778401|title=Luxembourg regulator accused of failing to protect investors|newspaper=Financial Times|date=23 February 2020|last1=Riding

Anti-Money Laundering and Countering the Financing of Terrorism (AML/CTF)

Within the framework of its statutory mission, the CSSF is in charge of ensuring that all the persons subject to its supervision, authorization, or registration comply with the professional AML/CTF obligations. However, recent disclosure about Director General Claude Marx being cited in the Panama Papers as having a key involvement in over 100 offshore companies whilst at HSBC Private Bank, as well as the CSSF's poor track record in addressing AML complaints, have served to undermine its credibility as an AML enforcer.

References

References

1. "Home: Commission de Surveillance du Secteur Financier (CSSF)".
2. "National supervisors".
3. "Members and Observers".
4. "Board of Supervisors".
5. "National Resolution Authorities".
6. ({{date). "General Board in Supervisory composition".
7. ({{date). "List of ESRB Members and National Macroprudential Authorities".
8. "404: Commission de Surveillance du Secteur Financier (CSSF)".
9. "Organisation générale: Commission de Surveillance du Secteur Financier (CSSF)".
10. "Mission et compétences: Commission de Surveillance du Secteur Financier (CSSF)".
11. [http://www.imf.org/external/pubs/ft/scr/2011/cr11148.pdf Luxembourg: Financial System Stability Assessment—Update] IMF. July 2011. Retrieved 25 December 20222
12. "La CSSF dans le viseur des administrateurs d'un fonds".
13. "'CSSF fails to enforce fund regulation' | Investment Officer".
14. "Intel Suisse".
15. "Claude Marx, directeur de la CSSF, très impliqué dans les Panama Papers | le Quotidien".