Luxembourg Update CSSF EMIR Questionnaire Results

The Commission de Surveillance du Secteur Financier issued a press release regarding the results of its 2018 EMIR investment fund managers' questionnaire. 22 Oct 2019

On 14 October 2019, Luxembourg's financial regulator, the Commission de Surveillance du Secteur Financier ("CSSF") issued a press release1 regarding the results of its 2018 EMIR investment fund managers' ("IFM") questionnaire.

Background

In August 2018, the CSSF issued a questionnaire on Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories ("EMIR") to IFMs under its supervision. The aim of the questionnaire was to collect information directly from IFMs regarding the existence of adequate EMIR monitoring and oversight procedures to ensure that each IFM and the funds they manage comply with their EMIR obligations.

Outcome of the Review

Following the CSSF's review of the questionnaires, it has identified that:

(i)the current monitoring and oversight procedures are, in general, not compliant with the EMIR requirements nor, where relevant, are they compliant with the EMIR requirements set out in CSSF Circular 18/698; and

(ii)a small number of IFMs have potentially significant deficiencies.

As a result, the CSSF has contacted a number of IFMs with potentially significant deficiencies in order to request these IFMs to improve their EMIR monitoring and oversight procedures by the end of the year.

Key Points

The CSSF has highlighted a number of key points in the press release:

Written Procedures: Adequate written procedures and arrangements must be in place to cover the supervision of all EMIR obligations even when a specific obligation does not apply further to the IFM's assessment. IFMs must document their assessments and review the adequacy of their monitoring and oversight procedures on a regular basis.

Delegation: IFMs are responsible for ensuring that the funds they manage comply with their EMIR obligations, even when these obligations have been delegated to another entity. In addition, IFMs must carry out initial and ongoing due diligence on the delegate to appropriately monitor the delegated EMIR obligations and put in place arrangements to clearly establish the roles and responsibilities of the IFM and the...

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