Outsourcing Made Easier: Professional Secrecy In The Financial And Insurance Sector Softened

Through the law of 27 February 2018 implementing the EU regulation (UE) 2015/751 on interchange commissions for card based payments, which amends various laws relating to the financial sector (and was published in the Luxembourg official gazette on March 1st 2018), the Luxembourg parliament has now relaxed the rules on professional secrecy for banks, investment firms, other regulated professionals of the financial sector, payment institutions, electronic money institutions and insurance undertakings (together the « financial institutions ») to facilitate outsourcing arrangements.

Until now there was some uncertainty around the possibility to rely on a client's consent for the transfer of client data to third parties, since the professional secrecy rules incumbent upon financial institutions were considered by courts to be public policy provisions, i.e. provisions to which contractual derogations are not allowed.

The new law provides that clients of financial institutions may consent to the transfer of their data by such financial institutions to an outsourcee.

Consent can be explicit or implied based on the information provisions agreed among parties.

Many financial institutions have agreed on general terms and conditions with their clients which provide that amendments may be made thereto by merely giving notice to the client and that they will become effective within a certain period of time failing an...