Publication of Circular CSSF 25/870 amending Circular CSSF 24/853 on the revised long form report for investment firms

The CSSF published today Circular CSSF 25/870 amending Circular CSSF 24/853 on the revised long form report (RLFR) (the Circular) of investment firms incorporated under Luxembourg law, including their branches.

Whereas for the financial year ending 31 December 2023, the RLFR was applicable to a sample of investment firms only, the aim of the circular is to extend the scope of application of Circular CSSF 24/853 as from the financial year ending 31 December 2024. Consequently, all investment firms incorporated under Luxembourg law, including their branches, are required to prepare a RLFR as from said financial year.

The CSSF recalls that the reporting framework implemented by Circular CSSF 24/853 comprises four dedicated reports. With reference to the principle of proportionality, the CSSF introduces a more proportionate approach for investment firms who are subjected to the RLFR for the first time as from the year ending 31 December 2024 and who, in consideration of their risk attributes, represent a comparably lesser risk. Those investment firms (the Partial Scope IF) are subject to a lighter RLFR framework and are required for the time being to submit 3 dedicated reports only.

The circular reconfirms that Partial Scope IF must assess their compliance and the effectiveness of their internal organisational arrangements via the RLFR self-assessment questionnaire (the SAQ).  Partial Scope IF must also mandate their réviseur d’entreprises agréé (REA) to prepare the report on the protection of financial instruments and funds belonging to clients in accordance with Article 7 of the Grand-ducal Regulation of 30 May 2018 (the MiFID report) and the report concerning anti-money laundering and countering the financing of terrorism in accordance with Articles 49(2) and 49(3) of CSSF Regulation No 12-02 of 14 December 2012 (the AML/CFT report). Given their comparably lesser risk, the CSSF has decided, for the time being, to exempt Partial Scope IF from the requirement to have Agreed Upon Procedure (AUP) reports prepared by their REA. This exemption will result in lesser work to be performed by the REA in the context of the RLFR which in turn should result in reduced regulatory costs for the Partial Scope IF. Moreover, as a general principle, under the revised framework, the work to be performed by the REA is limited compared to the requirements of Circular CSSF 03/113 and shall now focus solely on certain MiFID and AML/CFT requirements.

The SAQ for the financial year ending 31 December 2024 is overall consistent with the previous year version. Limited additions have been performed to provide more guidance to investment firms and integrate selected regulatory aspects with respect to e.g. MiFID requirements concerning the protection of financial instruments and funds belonging to clients and DORA preparedness. Amendments resulting in limited redrafting of some of the SAQ questions to clarify the CSSF’s expectations have also been performed.

The CSSF plans to invite investment firms to a virtual information workshop on the RFLR in the coming weeks to further guide investment firms and notably Partial Scope IF.

Submission process

The CSSF reminds investment firms that the RLFR must be documented and uploaded via the CSSF eDesk platform. The RLFR can be submitted to the CSSF via the following channels:

• An online solution via eDesk procedure for manual input by the investment firms.
• The Application Programming Interface (API) solution based on the use of a structured exchange file (json format) to be transmitted to the CSSF via the S3 (“simple storage service”) protocol. This file will then pre-fill the questionnaire available on the CSSF eDesk platform. The investment firm will also be able to update directly in eDesk the data pre-filled through S3. The manual input of the responses directly in the eDesk online form remains possible.

Investment firms can rely on the following user guides:

• A user guide “Authentication and user account management”, already available via the eDesk Portal of the CSSF: eDesk.
• The dedicated user guide for the “Long-Form Report” that will be available via the eDesk Portal of the CSSF.

The portal of the RFLR for the financial year ending 31 December 2024 should be accessible in the following weeks.

Any question relating to this communication, Circular CSSF 24/853 as amended, or the RLFR should be addressed to lfrei@cssf.lu by copying your usual point of contact at the CSSF.

Any technical questions regarding the communication channels mentioned above should be addressed to eDesk@cssf.lu.