The CSSF

The Commission de Surveillance du Secteur Financier, or CSSF, is the supervisory authority for professionals and products in the Luxembourg financial sector (not to be confused with the CAA, its equivalent in the insurance sector).

What Boards can do in this context?

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Develop a clear and compliant organizational structure in line with CSSF regulatory requirements

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Serve as the primary point of contact between the CSSF and the company’s governing bodies

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Ensure sound governance and regulatory compliance

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The CSSF ?

The Commission de Surveillance du Secteur Financier, or CSSF, is the supervisory authority for professionals and products in the Luxembourg financial sector (not to be confused with the CAA, its equivalent in the insurance sector)1. Established in 1998, it is a public institution dedicated to maintaining financial stability, ensuring compliance with existing regulations, and protecting investors and consumers. The CSSF supervises, among other things:

  • Banks and credit institutions – although the European Central Bank (ECB) is responsible for prudential supervision of Luxembourg’s four largest banks. The CSSF and the ECB cooperate in supervising the rest of the country’s banking institutions. 

  • Investment companies and funds, and related activities 

  • Electronic money institutions 

  • Payment institutions 

  • Specialised PFS (professionals of the financial sector2) 

  • Support PFS3

  • The audit profession  

The Regulatory Framework 

On its website, the CSSF compiles, in descending order of authority, the main international, European and national rules adopted and/or applied within the scope of its missions and powers.

(Picture: Benjamin Champenois / archives)

History

The December 23rd, 1998 law4 created the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg. The CSSF thus became the competent authority for the prudential supervision of companies in the financial sector. It replaced the Institut Monétaire Luxembourgeois (IML), the monetary and supervisory authority which, in 1983, had also replaced the Commissaire au Contrôle des Banques, whose creation in 1945 had marked the beginning of the “modern era of supervision of the Luxembourg financial centre”5. 

The CSSF today

By December 31st 2022, the CSSF had no fewer than 968 staff specialising in various areas such as banking supervision, asset management, securities markets, and market infrastructure supervision6. 

Internal organisation 

The CSSF is made up of various expert and ad hoc committees7, including:  

  • The Anti-Money Laundering Committee 

  • The Investment Fund Managers (IFM) Committee

  • The Audit Technical Committee

  • The Capital Markets Committee

Missions

The CSSF carries out its supervisory missions and reinforces the regulatory framework to protect the stability of the financial sector. Within the limits of its competence, it ensures compliance with legal standards and regulations in force to protect financial consumers, and supervises the financial sector based on a risk-based (macro)prudential supervision8.

To this end, it ensures that the guidelines and recommendations of the three European financial supervisory authorities are applied: the EBA’s (European Banking Authority), ESMA’s (European Securities and Markets (European Banking Authority), and EIOPA (European Insurance and Occupational Pensions Authority), to ensure uniform and consistent financial supervision across the European Union9.

In particular, the CSSF ensures:

  • Bank supervision

  • The supervision of PFS, including: investment firms, specialised PFS, and support PFS;

  • The supervision of payment and electronic money institutions

  • The supervision of investment fund managers and UCIs (Undertakings for Collective Investment10)

  • The supervision of securitisation undertakings

  • Pension fund supervision 

  • The supervision of financial asset markets

  • Market infrastructures monitoring

  • Information systems monitoring

  • Compensation oversight 

  • Public oversight of the audit profession 

  • The protection of financial consumers, through financial education, and alternative dispute resolution;

  • The procedure for notifying the CSSF of violations of the financial centre’s regulatory framework (whistleblowing)11.

Financial crime

Monitoring the fight against money laundering and the financing of terrorism (AML/CFT)12 is at the heart of the CSSF’s mandate and Luxembourg’s financial policy, as the country was the first in Europe to transpose the First European Anti-Money Laundering Directive (91/308/EEC) into national law13. The September 2023 FATF report stresses that “the Grand Duchy of Luxembourg has a solid anti-money laundering and combating the financing of terrorism (AML/CFT) framework and a good understanding of the risks associated with money laundering and the financing of terrorism”14. 

Sustainable finance

As the CSSF’s mandate is rooted in preserving the stability of the financial sector, the CSSF is committed to ensuring that environmental, social and governance (ESG) practices, as well as recent developments in European regulation (cf. European Commission Action Plan: Financing Sustainable Growth14), are pursued and implemented in financial activities, in order to ensure the adoption of best practices and the integration of sustainable development into the organisation, strategies and risk management of system players15. 

The CSSF strives to proactively support the transition of the financial sector and its players in order to actively contribute to the realisation of the Sustainable Development Goals (SDGs) 2015-2030, as well as the objectives of the Paris Agreement (COP21). To this end, the CSSF has become an official Network of greening the financial system (NGFS) member. 

Technological and financial innovation: the Innovation Hub 

The CSSF maintains an ongoing dialogue with the FinTech industry and promotes open exchanges on potential new financial technologies, in particular to answer questions about their relation to the existing regulatory framework16. 

Supervision tools

In order to ensure compliance with current standards, the CSSF carries out on-site inspections, and may subsequently impose sanctions17. The CSSF’s mandate also includes the ability to issue CSSF circulars and regulations to supplement existing regulations – within the limits of its competence. Finally, it ensures that professionals implement a prudential and proactive risk-based approach, and, in parallel, conducts analyses of credit, market, liquidity, and operational risks. 

The CSSF cooperates closely with the CRF (Cellule de renseignement financier) on AML/CFT matters, and financial sector professionals in turn have a legal obligation to cooperate with them to ensure the integrity of the system.

Cooperation Between Regulatory Authorities 

The CSSF collaborates with other national, European, and international regulators, and actively participates in the work of several international organisations, such as the European Securities and Markets Authority (ESMA), the European Banking Authority (EBA) (responsible for implementing a set of rules to regulate and supervise the banking sector in all EU countries18), the European Insurance and Occupational Pensions Authority (EIOPA) and the International Organisation of Securities Commissions (IOSCO). 

For further information

The CSSF regularly publishes notices on recent national and international regulatory developments. The CSSF also issues warnings about fraudulent and unauthorised activities.

Read the new legislative packages and the evolution of national regulations in the Grand Duchy of Luxembourg.

Further information on procedures as well as the Innovation Hub.

Contacts

Website

Contact 

Directory and E-mail addresses for specific mailings (in French).

direction@cssf.lu  

(+352) 26 251 – 1 

Mailing address: 
L-2991 Luxembourg 

Head office address: 
283, route d’Arlon 
L-1150 Luxembourg 

  1. CSSF ↩︎
  2. Specialised PFS ↩︎
  3. Support PFS ↩︎
  4. December 23, 1998 law ↩︎
  5. CSSF history ↩︎
  6. CSSF (2022). Rapport d’activités 2022 ↩︎
  7. Expert and ad hoc committees ↩︎
  8. CSSF ↩︎
  9. European System of Financial Supervision (ESFS) ↩︎
  10. UCIs ↩︎
  11. CSSF (2022). Rapport d’activités 2022 ↩︎
  12. Financial crime ↩︎
  13. CSSF history ↩︎
  14. FATF (2023). Luxembourg’s measures to combat money laundering and terrorist financing ↩︎
  15. COMMUNICATION DE LA COMMISSION AU PARLEMENT EUROPÉEN, AU CONSEIL
    EUROPÉEN, AU CONSEIL, À LA BANQUE CENTRALE EUROPÉENNE, AU COMITÉ
    ÉCONOMIQUE ET SOCIAL EUROPÉEN ET AU COMITÉ DES RÉGIONS Plan d’action:
    financer la croissance durable     ↩︎
  16. Sustainable finance ↩︎
  17. Innovation Hub ↩︎
  18. CSSF (2022). Rapport d’activités 2022 ↩︎
  19. European Banking Authority (EBA) ↩︎

Index

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