Material operations

The Law of May 5, 2026 (the “Law”), amending the Law  of April 5, 1993 on the Financial Sector (hereinafter the “LFS”) and transposing Directive (EU) 2024/1619 (“CRD VI”), introduces new obligations regarding material operations planned by credit institutions or (mixed) financial holding companies (hereinafter “institutions”). These operations include acquisitions or divestitures of a material holding, material transfers of assets and liabilities, and mergers and divisions.

Specifically, the Law requires institutions to provide prior notification before carrying out a material operation, as well as to obtain approval from the CSSF for such operations that are likely to have a significant impact on the institution’s prudential position or to raise concerns regarding money laundering or terrorist financing.

To ensure compliance with the principle of proportionality, these rules apply exclusively to operations deemed material. It is the responsibility of institutions to assess the materiality of their operations.

A holding is considered material where it is equal to or more than 15% of the institution’s eligible capital.

If the proposed acquisition involves a qualifying holding in a credit institution as defined in Article 6 of the LFS, the institution is subject to both the notification and assessment requirements set forth in that article.

A transfer of assets and liabilities, whether carried out through a sale or any other type of transaction, is considered material where the operation is at least equal to 10% of the institution’s total assets or liabilities.

If the proposed transfer takes place between entities belonging to the same group, the operation is considered material where it is at least equal to 15% of its total assets or liabilities.

All mergers and divisions are deemed material by default.

Where the merger or division results in the creation of a new entity, the operation will not be subject to the specific process for material operation but will follow the relevant legal requirements and standard approval procedures.

Institutions are required to notify their competent authority in writing in advance where they intend to carry out any material operation. To facilitate the notification and evaluation process, it is strongly recommended that institutions engage in preliminary discussions with the CSSF before formally submitting the notification. These preliminary discussions help clarify regulatory expectations, the scope of the required information, deadlines, the competent authority or authorities involved, and any potential coordination with other related procedures.

The notification must be prepared in accordance with the detailed requirements set forth in the Regulatory Technical Standards (RTS) derived from the new provisions of the LSF relating to material operations (Articles 53-46 et seq.). The CSSF does not require any additional information and does not mandate the use of a specific form but reserves the right to request any additional information it deems necessary.

Pending the publication in the Official Journal of the delegated act establishing these standards, the notification must be completed in accordance with the draft technical standards published by the European Banking Authority (EBA/RTS/2026/06).

The CSSF is the competent authority responsible for receiving and evaluating notifications pertaining to “less significant institutions.” These notifications must be submitted by email to the CSSF, specifically to the attention of the institution’s line supervisor.

The ECB is the competent authority for assessing material operations involving “significant institutions.” Notifications from significant institutions must be submitted via the SSM portal (SSM Portal).

In situations involving entities established in multiple Member States, the operation may require different institutions to notify their respective supervisors. However, there is one competent authority responsible for the assessment, which is due to collaborate with others as needed.

Competent authorities seeking to consult with the CSSF regarding material operations are invited to use the following email address: banque@cssf.lu.

The notification and evaluation processes vary depending on the nature of the operation. The table below summarises the key elements of the process for each type of material operation.

* Where the operation only involves entities belonging to the same group, as defined in Article 53-46, paragraph 7, of the LFS.

** Where the operation only involves institutions belonging to the same group.

The assessment period formally begins on the date the competent authority issues an acknowledgment of receipt confirming that the notification is complete. This acknowledgment specifies the end date of the evaluation period. If the notification is deemed incomplete, the competent authority shall notify the institution within a reasonable time frame, specifying the missing information that must be submitted.