{"id":"circulars/cssf-23-841","title":"Circular CSSF 23/841","type":"circular","date":"2023-10-13","kind":"circular","html":"

Circular CSSF 23/841 is a CSSF circular, published 13 October 2023. Subject: 1) Application of the Guidelines of the European Securities and Markets Authority (“ESMA”) on certain aspects of the MiFID II remuneration requirements (ESMA35-43-3565) 2) Repeal of Circular CSSF 14/585 3) Modification of Circular CSSF 07/307.

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Legal basis: Law of 5 April 1993 on the financial sector, Law of 12 July 2013 on alternative investment fund managers.

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Relevant for: AIFMs, Credit institutions, Investment firms, Investment fund managers, Management companies - Chapter 15, Management companies - Chapter 16.

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Main topic: MiFID II. Keywords: Internal governance, Remuneration, UCI administration.

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Repeals Circular CSSF 14/585.

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Text

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Circular CSSF 23/841 1) Application of the Guidelines of the European Securities and Markets Authority (“ESMA”) on certain aspects of the MiFID II remuneration requirements (ESMA35-43-3565) 2) Repeal of Circular CSSF 14/585 3) Amendment to Circular CSSF 07/307

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In case of discrepancies between the French and the English texts, the French text shall prevail.

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Circular CSSF 23/841 1) Application of the Guidelines of the European Securities and Markets Authority (“ESMA”) on certain aspects of the MiFID II remuneration requirements (ESMA35-43-3565) 2) Repeal of Circular CSSF 14/585 3) Amendment to Circular CSSF 07/307 To the investment firms as defined in point (9) of Article 1 of the Law of 5 April 1993 on the financial sector, as amended (“LFS”), to the credit institutions as defined in point (12) of Article 1 of the LFS, to the UCITS management companies as defined in point (31) of Article 1 of the LFS, and to the alternative investment fund managers as defined in point (46) of Article 1 of the Law of 12 July 2013 on alternative investment fund managers (“LAIFM”).

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Luxembourg, 13 October 2023 Ladies and Gentlemen, The purpose of this circular is to inform you that the CSSF, in its capacity as competent authority, applies the Guidelines of ESMA on certain aspects of the MiFID II 1 remuneration requirements (ESMA35-43-3565) (“Guidelines”), published on 3 April 2023. Consequently, the CSSF has integrated the Guidelines into its administrative practice and regulatory approach with a view to promoting supervisory convergence in this field at the European level. All entities listed in the scope of this circular are required to duly comply with them. Circular CSSF 14/585 on the transposition of ESMA’s guidelines on remuneration policies and practices (MiFID) shall be repealed. Annex V to Circular CSSF 07/307 shall be repealed.

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1 Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU.

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  1. The Guidelines The Guidelines are issued by ESMA in accordance with Article 16(1) of the ESMA Regulation 2. The purpose of the Guidelines is to ensure the common, uniform and consistent application of: -
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the remuneration requirements set out in Article 27 of the MiFID II Delegated Regulation 3;

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the conflicts of interest requirements in the area of remuneration set out in Articles 16(3) and 23 of MiFID II and Article 34 of the MiFID II Delegated Regulation in the area of remuneration; and

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the conduct of business rules set out in Article 24(1) and (10) of MiFID II.

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The Guidelines also clarify the governance requirements in the area of remuneration under Article 9(3) of MIFID II. The Guidelines aim to promote greater convergence in the interpretation of, and supervisory approaches to, the MiFID II remuneration requirements as well as the MiFID II conflicts of interest and conduct of business requirements in the area of remuneration, by emphasising a number of important issues, and thereby enhancing the value of existing standards. Furthermore, the Guidelines repeal those of ESMA on remuneration policies and practices (MiFID) (ESMA/2013/606). The Guidelines are attached to this circular and are available on ESMA’s website at Guidelines on certain aspects of the MIFID II remuneration requirements (europa.eu).

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  1. Scope This circular shall apply to: -
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investment firms as defined in point (9) of Article 1 of the LFS;

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credit institutions as defined in point (12) of Article 1 of the LFS when providing investment services and activities within the meaning of point (30) of Article 1 of the LFS;

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The text above is the opening of the document; the PDF carries the whole.

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Document page, PDF. Source: Commission de Surveillance du Secteur Financier (CSSF), reproduced with the CSSF's consent. The French text prevails.

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