Publication of the Law of 5 May 2026 transposing Directive (EU) 2024/1619 (CRD VI) and Directive (EU) 2024/2994

The CSSF informs the public of the publication of the Law of 5 May 2026 (hereinafter the “Law”), which, inter alia, amends the Law of 5 April 1993 (hereinafter the “LFS”) and transposes Directive (EU) 2024/1619 of the European Parliament and of the Council of 31 May 2024 amending Directive 2013/36/EU as regards supervisory powers, sanctions, third-country branches, and environmental, social and governance risks (hereinafter “CRD VI”) and Directive (EU) 2024/2994 of the European Parliament and of the Council of 27 November 2024 amending Directives 2009/65/EC, 2013/36/EU and (EU) 2019/2034 as regards the treatment of concentration risk arising from exposures towards central counterparties and of counterparty risk in centrally cleared derivative transactions. The Law was published in the Journal Officiel du Grand-Duché de Luxembourg (Memorial A n° 227) on 6 May 2026.

CRD VI bolsters the internal governance framework of credit institutions, introduces new requirements relating to the management of ESG and crypto-asset risks, and grants enhanced prudential powers to supervisory authorities with respect to material operations, such as mergers or transfers of assets. In addition, the Law introduces into the LFS a new harmonised prudential framework applicable to third-country branches and strengthens the rules on administrative penalties and measures. A transitional period is provided for the provisions relating to third-country branches and the third-country regime for the provision of banking services, which will apply from 11 January 2027. It should also be noted that the last aspect of CRD VI, aimed at ensuring the independence of competent authorities, their staff and governing bodies, is being transposed separately (draft law no 8705).

By way of this communiqué, the CSSF would like to draw the attention of CRR institutions and third-country branches to the internal governance, notably with regard to the fit and proper (“FAP”) procedure and the status of Circular CSSF 12/552 (as amended) on the central administration, internal governance and risk management (hereinafter “Circular CSSF 12/552”).

The new internal governance framework resulting from the Law will be supplemented and specified by the European Banking Authority’s (EBA) guidelines on internal governance, which are currently being revised to align with the changes introduced under CRD VI. Their publication is expected by the end of the third quarter of 2026. Accordingly, Circular CSSF 12/552 will be updated following the publication of these guidelines to ensure maximum alignment with the European framework.

The version of Circular CSSF 12/552 currently in force will remain applicable until the publication of a revised version, with the exception of the provisions directly amended by the Law in the LFS, which shall apply as from the entry into force of the latter.

The “fit-and-proper” (“FAP”) criteria for assessing the suitability of members of the management body and key function holders have been tightened in the Law. As the EBA is also in the process of updating its guidelines in this respect, the CSSF’s prudential procedure will be adapted accordingly following the amendments introduced by the Law and the publication of these amended guidelines.

As regards the changes made to the definitions in the LFS relating to governance, the former term “authorised management” must now be understood to refer to all the members of the “Management Body in its Management Function” (MBMF) in accordance with the European terminology. Consequently, the CSSF specifies that any reference to “authorised management” in the version of Circular CSSF 12/552 currently in force and in any other CSSF regulatory publication applicable to CRR institutions must henceforth be read and understood in this sense.

The CSSF invites CRR institutions and third-country branches to regularly consult the official publications on the CSSF’s website for any information relating to the Law, the CSSF’s prudential procedures, and updates to CSSF circulars (in particular Circular CSSF 12/552, updated in collaboration with the ABBL). For any further questions, supervised entities should contact their usual supervisory teams.

For any question relating to this communiqué, please contact  banque@cssf.lu.