26 octobre 2011

Communiqué de presse 11/36

Frequently asked questions – Addendum 1 to press release 11/31

1. What is the nature of ARM’s challenge?

On 29 September 2011, ARM formally requested the Commission de Surveillance du Secteur financier (“CSSF”) to revise its decision whereby it had refused to grant a licence to ARM as a regulated securities undertaking under the Luxembourg law of 22 March 2004 on securitisation (the “Decision”). The request was submitted under form of an application with the CSSF to review its Decision, a so-called “recours gracieux”. This application by itself does not trigger a review before the Luxembourg courts at this stage. It is an invitation addressed to the CSSF to review its own Decision. It has as an effect to suspend the period within which a judicial appeal must normally be brought before the Luxembourg courts to challenge the Decision (which is one month). The CSSF may respond at any time to this application, but if it does not do so within 3 months after the filing of the application, a new one-month appeal period will start to run automatically.

During this period, the CSSF remains commissaire de surveillance (“Supervisory Commissioner”) and the regime of suspension of payments by ARM and prohibition for ARM, under penalty of voidance, to take any measures other than protective measures unless otherwise authorized by the CSSF remain in place.

2. What happens if the CSSF changes its Decision?

If the CSSF, following the recours gracieux, were to change its Decision so as to accept that ARM be admitted to the list of licensed securitisation undertakings under the Luxembourg law of 22 March 2004 on securitisation, the suspension of payments would be lifted and the CSSF would no longer take on the role of Supervisory Commissioner.

3. What happens if the CSSF upholds its Decision?

If the CSSF, following the recours gracieux, were to uphold its Decision (either expressly or implicitly by not responding to the application), ARM would be given a period of one (1) month to formally appeal to the Luxembourg administrative courts for a formal judicial review of the Decision (recours administratif). A Luxembourg court would then have to decide on whether to reverse the Decision or to uphold it. Depending on the outcome, the CSSF or ARM could thereafter appeal against the court’s ruling at first instance.

4. Will ARM now be liquidated and what are the timelines?

ARM is currently not in liquidation and no liquidator has been appointed.

A liquidator will only be appointed by a Luxembourg court if one of the following situations occurs:

  • ARM withdraws its recours gracieux before the CSSF expressly takes a position in respect of the recours gracieux. In this case, the Decision would have become final and a liquidator could be appointed within a matter of weeks;
  • the CSSF, following the recours gracieux decides to uphold its Decision (or does not respond to the recours gracieux) and ARM decides not to lodge a formal appeal with the Luxembourg courts for a formal judicial review of the Decision (recours administratif). In this scenario the process would most likely be rather speedy and one could anticipate that ARM would enter into liquidation within weeks after the expiry of the one-month appeal period; or
  • the CSSF upholds its Decision and ARM lodges a formal judicial appeal (recours administratif) and the Luxembourg administrative courts eventually uphold the CSSF’s Decision following a recours administratif lodged by ARM. This process is likely to take several years.

5. What is the current situation?

ARM submitted a recours gracieux with the CSSF, requesting the CSSF to review its Decision on 29 September 2011. From that date, the CSSF has a maximum period of three months to undertake such review and to decide whether to uphold or change its Decision. If the CSSF does not take an explicit decision either way within this three-month period, this will in essence have the same effect as if the CSSF had rejected the recours gracieux.

If the CSSF upholds its Decision or does not respond, ARM has one month (starting with the notification that its application has been rejected or, as the case may be, with the expiry of the three-month period) to lodge a recours administratif with the Luxembourg courts:

Once the Luxembourg courts have ruled on the matter in the first instance, either party could then appeal to a higher (and last instance) court. The overall process could take several years.

In the meantime ARM would remain in a situation of suspension of payments and be supervised by a Supervisory Commissioner.


Please find below links to former CSSF press-releases relating to ARM: