Legal requirements and authorisation procedure for support professionals of the financial sector (“support PFS”)
The legal requirements that must be met and the procedure that must be followed in order to obtain an authorisation as support PFS are laid down in Articles 13 to 23 of the Law of 5 April 1993 on the financial sector (“LFS”).
An authorisation as support PFS may only be granted to legal persons in the form of a public entity or a commercial company.
Support PFS shall prove that they have a subscribed and fully paid-up share capital of not less than EUR 50,000. Depending on the category of support PFS for which the authorisation is sought, the required minimum share capital may amount to up to EUR 370,000. Please consult the relevant legal provisions of the LFS in order to determine the minimum share capital required for the categories of support PFS you seek.
Central administration and infrastructure
An applicant shall prove that its central administration and its registered office are located in Luxemburg. The support PFS shall produce evidence that it has a sound administrative and accounting organisation and adequate internal control procedures. The administrative and accounting organisation and internal control procedures shall be comprehensive and proportionate to the nature, scale and complexity of the activities of the support PFS. The support PFS shall have an appropriate infrastructure at its registered office, i.e. its own executing personnel, its own execution systems, the documentation relating to the transactions as well as the support functions in accounting, IT and internal control, and shall have an internal audit function.
Please refer to Circular CSSF 12/544 “Optimisation of the supervision exercised on the “support PFS” by a risk-based approach”.
Natural and legal persons are allowed as shareholders or members in support PFS, provided that they are previously authorised by the CSSF. In order to be authorised, the applying support PFS shall communicate to the CSSF the identity of any direct or indirect shareholder or member with a direct or indirect qualifying holding and the percentage held in the support PFS. “Qualifying holding” means any direct or indirect holding in the support PFS which represents 10% or more of the capital or of the voting rights or which makes it possible to exercise a significant influence over the management of the support PFS.
The shareholders or members with a qualifying holding shall fulfil the required conditions to ensure a sound and prudent management. The concept of sound and prudent management shall be assessed in the light of the criteria listed in Article 18(9) of the LFS. The main criteria are:
- the professional standing of the shareholders or members;
- the professional standing and experience of any person who will direct the business of the support PFS upon obtaining the authorisation;
- the financial soundness of the shareholders or members;
- the risk of money laundering and terrorist financing.
Professional standing and experience
In order to obtain authorisation, the members of the administrative, management and supervisory bodies and the shareholders or members with a qualifying holding shall prove their professional standing. Professional standing is assessed on the basis of the extracts from the police record and of any other evidence showing that the persons concerned are of good repute and offer every guarantee of irreproachable conduct.
The persons responsible for the day-to-day management shall be empowered to effectively direct the business and shall have adequate professional experience, i.e. they shall have previously carried out similar activities at a high level of responsibility and autonomy.
The day-to-day management shall be entrusted to at least two natural persons, who must both have professional standing and experience and closely equal powers. This two-man management principle shall allow mutual control and common decision-taking, but does not necessarily imply that these persons must act together to commit the support PFS. These persons must be reachable by the CSSF at any time in case of need, i.e. they shall reside in Luxembourg or in the Grande Région. An exemption from the requirement of residence may be requested for one of these persons but only for the first six months following the issue of the authorisation.
The support PFS shall entrust the audit of its accounting documents to one or several réviseurs d’entreprises agréés (approved statutory auditors) who have adequate professional experience. The réviseur d’entreprises agréé shall be appointed by the body responsible for managing the support PFS, i.e. the board of directors for sociétés anonymes and the managers (gérants) or the management board for sociétés à responsabilité limitée.
The authorisation as a support PFS is granted by the Minister responsible for the CSSF, i.e. the Minister of Finance, upon written application and following an investigation of the application file by the CSSF. The CSSF verifies whether the conditions laid down in the LFS are fulfilled.
In order to simplify administrative burdens, the CSSF encourages applicants to first transmit their application files to the CSSF before filing the formal application request with the Minister of Finance.
The authorisation is granted for an unlimited period of time provided the support PFS complies at all times with the applicable legal requirements. Upon receipt of the authorisation, the support PFS may immediately start to carry on business.
Before transmitting the application to the CSSF, the applicant may contact the CSSF to request information on the qualification of an activity, on the need for an authorisation, on the status requested, on the application documentation for the authorisation file or any other important question relating to the applicant’s project. The applicant may also request a meeting to present the project and to discuss certain aspects of it.
The examination of the file by the CSSF
In order to speed up the verification process, the applicant shall submit a detailed and complete file to the CSSF and use the application forms available on the CSSF website.
The complete application file shall be submitted to the CSSF in paper form and shall, in addition, be transmitted in electronic form to firstname.lastname@example.org.
Upon receipt of the file by the CSSF, the applicant receives an acknowledgement of receipt which indicates the department in charge of the examination of the file and the name of a contact person at the CSSF. The CSSF will examine the file and may raise comments or request additional information.
Once the CSSF deems that the conditions laid down in the LFS are fulfilled, the applicant will be notified in writing and the applicant may file an official request with the Minister of Finance.
The formal analysis by the Minister of Finance
The application file submitted to the Minister of Finance shall be signed by the initiators of the project and all the relevant annexes shall be enclosed. The annexes and, in particular, the declarations of honour and the extracts from the police records must be original documents. All information contained in the annexes must be up to date and the extracts from the police records must not be older than three months.
The decision of the Minister of Finance will be notified to the applicant within six months following receipt by the Minister of Finance of the application file. Should the application file be incomplete, the applicant will be notified of the decision of the Minister of Finance within six months following receipt of the missing information. All decisions on an application request shall be motivated in fact and in law.
A decision shall be taken within 12 months, at the latest, of the receipt of the application. If no decision is notified within 12 months, it means that the application has been refused.
The decision of the Minister of Finance may be appealed against and referred to the Tribunal administratif (Administrative Court), which deals with the substance of the case. The appeal shall be filed within one month, or else shall be time-barred.