Two circulars (Circular 22/805 and Circular 22/806) published by the CSSF on 22nd April 2022 aiming at applying and integrating the revised EBA Guidelines on outsourcing arrangements (EBA/GL/2019/02 or the Guidelines) into the Luxembourg’s regulatory and administrative framework.
The circulars apply to (i) credit institutions and professionals of the financial sector within the meaning of the Law of 5 April 1993 on the financial sector (LFS), (ii) payment institutions and electronic money institutions within the meaning of the Law of 10 November 2009 on payment services, (iii) investment fund managers subject to Circular CSSF 18/698, (iv) undertakings for collective investment in transferable securities subject to Part I (UCITS) of the UCITS Law which designate a management company within the meaning of the UCITS Law, (v) central counterparties (CCPs), including Tier 2 third country CCPs, complying with the relevant requirements of EMIR, (vi) approved publication arrangements (APAs) with a derogation and authorised reporting mechanisms (ARMs) with a derogation within the meaning of the LFS, (vii) market operators operating a trading venue within the meaning of the LFS, (viii) all central securities depositories (CSDs), and to (ix) all administrators of critical benchmarks.
The CSSF Circular 22/806 is now the reference document for any outsourcing arrangements and will be applicable as of 30th June 2022.
The relevant entities must review and amend their existing outsourcing arrangements, so as to ensure that they are in line with this Circular by the time of the first renewal date of each existing outsourcing arrangement, but no later than 31st December 2022. Should the review and/or amendment to any outsourcing arrangements of critical or important functions not be finalised by 31st December 2022, the relevant entity must inform its competent authority in a timely manner and the measures envisaged to complete the review and/or amendment thereof or its exit strategy.
