With MiFID (Directive 2004/39/EC), the markets in financial instruments directive, the EU established a comprehensive set of rules regulating firms who provide investment services and activities linked to financial instruments, and the trading venues where financial instruments are traded. The aim of the MiFID framework is to promote financial markets that are fair, transparent, efficient and integrated.

    This first set of rules adopted by the EU sought to increase the competitiveness of financial markets by creating a single market for investment services and activities and to ensure a high degree of harmonised protection for investors in financial instruments, such as shares, bonds or derivatives.

    As shortcomings were exposed in the wake of the financial crisis, the European Commission adopted new rules revising the MiFID framework in June 2014. These consist of a directive (MiFID II) and a regulation (MiFIR).

    MiFID II
    Regarding investor protection in particular, MiFID II aims to reinforce the rules in various areas notably by:

    • enhancing investor protection and improving conduct of business rules as well as conditions for competition in the trading and clearing of financial instruments;
    • strengthening the protection of investors by introducing requirements on the organisation and conduct of actors in these markets;
    • introducing new requirements on product governance and independent investment advice, extending existing rules to structured deposits and improving the requirements in several areas, including on the responsibility of management bodies, inducements, information and reporting to clients, cross-selling, remuneration of staff, and best execution.

    MiFID II was transposed into Luxembourg law by the law of 30 May 2018 on markets in financial instruments (MiFID II law). This law is subdivided into two titles:

    • Title I deals with markets in financial instruments and replaced the law of 13 July 2007 on markets in financial instruments (the MiFID law) with the exception of Article 37 on the holding of an official listing;
    • Title II mainly concerns the amendments to the law of 5 April 1993 on the financial sector following the transposition of MiFID II.

    In the field of investor protection, MiFIR complements MiFID II by setting out requirements on, notably:

    • Intervention measures powers where ESMA and national supervisors (including the CSSF) are able to temporarily prohibit or restrict the marketing, distribution or sale of a financial instrument or a type of financial activity or practice where certain conditions are met;
    • The third country regimes allowing, under certain conditions, third country firms to provide investment services and to perform investment activities to clients in Luxembourg or in Europe.

    Product intervention measures

    Under MiFIR, the CSSF is able to temporarily prohibit or restrict the marketing, distribution or sale of a financial instrument or a type of financial activity or practice where certain conditions are met.

    Assessment of knowledge and competence of professionals

    ESMA has published on 22 March 2016 Guidelines for the assessment of knowledge and competence. The purpose of the Guidelines was to specify the criteria for the assessment of knowledge and competence required under Article 25(1) of MiFID II.

    Under Article 25(1) of MiFID II, Member States shall require the professionals concerned to ensure and demonstrate to competent authorities that natural persons giving investment advice or providing information about financial instruments, investment services or ancillary services to clients on behalf of the professional possess the necessary knowledge and competence to fulfil their obligations under Articles 24 and 25 of MiFID II. Member States shall publish the criteria to be used for assessing such knowledge and competence.

    The Guidelines set important standards to assist professionals in meeting their obligations to act in the best interest of their clients and to assist the CSSF to adequately assess how professionals meet these obligations.

    The purpose of the CSSF Circular 17/665 was to implement the Guidelines and to publish the information that the CSSF must specify as competent authority in accordance with points 21 and 22 of the Guidelines.

    Following up on Circular CSSF 17/665, the CSSF Circular 17/670 aimed at communicating (i) the minimum criteria that must be included in the external training foreseen in Circular CSSF 17/665 and (ii) details regarding the application file for registration on the list published on the CSSF website that the organisations proposing external professional training shall submit.

    Luxembourg national third country regime under MiFIR

    The CSSF has published on 10 April 2019 the Circular CSSF 19/716 on the provision of investment services or the performance of investment activities and ancillary services in Luxembourg by third-country firms in accordance with Article 32-1 of the Law of 5 April 1993 on the financial sector, as amended. The purpose of Circular CSSF 19/716 is to outline the different regimes available to these third-country firms under Article 32-1 of the LFS and under MiFIR, as well as the conditions to be met and the information and documentation to be submitted in this respect. One of these conditions is that the CSSF must deem the supervision and the authorisation rules of the third countries as equivalent to the LFS. Moreover, cooperation between the CSSF and the supervisory authority of the third-country firm must be ensured. In order to benefit from one of the regimes which fall under the competence of the CSSF, the third-country firms concerned must contact the CSSF and submit a file in order to comply with Article 32-1 of the LFS.

    Laws, regulations and directives



    For general questions
    For the assessment of knowledge and competence of professionals


    PRIIPs Regulation (EU) No 1286/2014 concerns the key information documents for packaged retail and insurance-based investment products.

    The purpose of the PRIIPs Regulation is to improve information disclosures and protection of retail investors with the provision of a key information document (KID) prior to the subscription of a packaged retail and insurance-based investment product (PRIIPs).

    A packaged retail and insurance-based investment product is an investment where, regardless of the legal form of the investment, the amount repayable to the retail investor is subject to fluctuations because of exposure to reference values or to the performance of one or more assets which are not directly purchased by the retail investor.

    Before a PRIIP is made available to retail investors, the PRIIP manufacturer shall draw up for that product a KID and shall publish the document on its website. Moreover, a person advising on, or selling, a PRIIP shall provide retail investors with the KID in good time before those retail investors are bound by any contract or offer relating to that PRIIP.

    The KID introduces common standards for the presentation of information for retail investors regarding packaged retail and insurance-based investment products which must allow these investors to understand and compare the main risks, features, costs and possible future performance of the products concerned.

    The PRIIPs Regulation applies since 1 January 2018.

    Laws, regulations and directives

    Other reference texts