LU - Clarification of the third country concept for investment services in Luxembourg


On 1 July 2020, the Luxembourg Commission for Financial Sector Oversight (CSSF) released a new regulation and a new circular (CSSF Regulation No. 20-02 and CSSF Circular 20/743, respectively) aimed at clarifying the legal regime for third country undertakings intending to provide investment services in Luxembourg, pursuant to Article 32-1 of the 1993 Law on the Financial Sector ("LSF").

The circular clarifies the concept of services provided "in Luxembourg" within the meaning of Article 32-1 of the LSF. Investment services are deemed to be provided in Luxembourg where:

  • The third-country firm has an office (e.g. a branch) in Luxembourg, the third-country firm provides an investment service to a retail client based or located in Luxembourg, or
  • Luxembourg is the location where the result specific to the service is delivered and for which payment is due.

The Regulation provides for a list of "equivalent third countries" pursuant to Article 32-1(1) of the LSF. The list includes Canada, Switzerland, United States, Japan, Hong Kong and Singapore. These jurisdictions are considered to apply LSF-equivalent supervision and authorisation, while firms from these jurisdictions are authorised to provide investment services in Luxembourg on a cross-border basis. The United Kingdom does not feature on the list for the time being.

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