1. What are the key regulatory bodies and laws that govern the banking and finance industry in Luxembourg, and how do they impact financial institutions?
The Luxembourg finance industry is mainly overseen by two regulatory bodies: the CSSF supervises the financial sector, while the CAA oversees the insurance sector. A merger control is currently being introduced through the Conseil de la Concurrence. The Luxembourg Central Bank manages financial stability and monetary policy, liaising closely with the European Central Bank (ECB) and the International Monetary Fund. Key legislations include the law of 5 April 1993 on the financial sector (LSF), which incorporates EU directives and sets professional, prudential, and conduct standards for financial entities. Separate laws govern banks issuing covered bonds (law of 8 December 2021) and insurance undertakings (law of 7 December 2015). Other significant laws touch on annual accounts, payment services, and the failure of credit institutions.
