Agefi Luxembourg - janvier 2026

Janvier 2026 9 AGEFI Luxembourg Économie / Banques By Glenn M EYER , Partner, Marc M OUTON , Partner & Enric C OMABASOSA - I -E SQUÉ , SeniorAssociate –Arendt &Medernach (1) C RDVI (2) does not fundamen- tally redefine governance standards for Luxembourg banks, as the core concepts are already embedded in the LFS (3) and Circular 12/552. (4) It seeks to foster supervisory convergence and reduce fragmentation across the EU by introducing more harmonised and granular internal governance require- ments,includingwithrespecttokeyfunc- tion holders. In Luxembourg, many of these requirements have long been applied through CSSF supervisory prac- tice,butwithoutanexplicitstatutorybasis. Bill of law 8627 (Bill) (5) therefore largely consolidatesexistingpracticeintotheLFS, while also introducing additional struc- turing obligations, notably in relation to individual role statements and clearer attributionof responsibilities. CRDVIwill thusprimarily raise the level of formalisationexpected frombanks. In particular, the Bill strengthens gover- nance requirements to ensure that ESG risks are identified, assessed and over- seen across the bank’s internal organisa- tion, including through risk manage- ment processes, governance structures and disclosure practices. This evolution is further reinforcedby the ongoing revi- sion of the EBA Consultation. (6) Once finalised, further alignment of Circular 12/552 can be expected. Together, these developments point to a tighteningofgovernanceexpectations,not somuch in substance, but in execution. Fit andproper: fromsupervisory condition to structured, legally anchoredprocess CRD VI’s strategy is explicitly framed as a response to divergent and, in some MemberStates,incomplete“fitandprop- er”regimes.Recital45notes,inparticular, that existing rules did not ensure that there is a timely suitability assessment of membersofthemanagementbodybythe appointing bank and that there were no rules for the suitability assessment of key function holders. Thatsaid,theseruleslargelyalreadyexist in Luxembourg in supervisory instru- ments and administrative practice. For example, the CSSF has long operated a robust, document-driven suitability framework for both (i) members of the management body and (ii) key function holders through Circular 12/552 and the “CSSF prudential procedure for the appointment ofmembersof themanage- ment body and key function holders in credit institutions” (CSSF Prudential Procedure), and by incorporating the Joint ESMAandEBAGuidelinesonsuit- ability (EBA/GL/2021/06) into its admin- istrative practice. The practical impact is therefore mostly that key elements of what has historically been grounded in supervisory instru- ments and administrative practice will now be anchored directly in the LFS and aligned with a harmonised framework across the EU. CRD VI introduces a more prescriptive framework, (7) with procedural steps and explicit powers for competent authorities to intervene both ex ante and ex post . The Bill reflects this approach by proposing to add a clearer and more detailed pro- cedure on the appointment of members of the management body to Article 7 of the LFS, including: - a formalised ex ante filing logic and timetable. CRDVI expresslyenvisages an “ ex ante suitability application” for at least “large institutions”, with a limit of 30 working days before the proposed start date.InLuxembourg,an exante ,file-based processisalreadypartofCSSFprudential practiceforcreditinstitutions;theBill’skey effect is to give this process a clearer legal basiswithin the LFS rather than leaving it primarily to supervisory instruments; - a standardised and document-driven assessment process, supported by a CSSF questionnaire, CV, internal suit- ability assessment, criminal records, and any additional documents requested by the CSSF, as well as confirmation of the intended appointment and effective start dates; - an explicit framework for ongoing and event-driven reassessments, underwhich the CSSFmay at any time request further information, conduct interviews, and reassess suitability, in particular where AML/CFT-related concerns arise, includ- ing by consulting relevant AML authori- ties or central EUAMLdatabases; and -strengthenedcorrectiveandenforcement powers,enablingtheCSSFtoblock exante appointments,revokemembers expost ,or requireremedialmeasurestorestorecom- pliance, combined with a duty on banks to promptly notify the CSSF of any new facts thatmay affect suitability. It is worth highlighting that, as noted above, CRD VI introduces a statutory regimeforkeyfunctionholders,including an obligation to assess suitability before they take up their position and periodi- cally thereafter, and an explicit duty to provide suitability information to the competent authority upon request. For Luxembourg banks, this will be viewed as a “hard law” consolidation of an approach that the CSSF already applies (via the CSSF Prudential Procedure and EBA/ESMAsuitabilityguidance),butwas previously not as clearly expressed in the LFS for key function holders. For Luxembourg banks, the practical impact is therefore primarily organisa- tional: appointment processes (and, increasingly, key function holder appointment andperiodic reassessment processes) will need to be formalised anddocumented so as to be immediate- ly usable by the CSSF, and remediation scenarios will need to be anticipated. Independence ofmindbecomes a legally anchored criterion Independence of mind has long been an importantelementofLuxembourgsuper- visorypractice.Inparticular,theCSSFhas placed significant weight on this criterion for banks that formpart of larger banking groups as away to ensure that thebank is genuinelymanaged at local level and not de facto “tele-managed” by another group entity.AlthoughalreadypartoftheCSSF’s administrativepractice,itistobeexpected that independence of mind will receive greaterconsiderationduringauthorisation processes/assessments. CRDVIdoesnotintroduceindependence ofmindasanewconceptinLuxembourg law, but instead reinforces its conse- quences by expressly rooting independ- ence of mind in the suitability criteria applicable to members of the manage- mentbodyunderArticle7oftheLFS,link- ing it to their ability to exercise independ- ent judgement, effectively challenge deci- sions andprovide robust oversight. The practical effect of this evolution is nonethelessrelevant:althoughindepend- ence of mind has traditionally been assessed through a combination of quali- tative judgement and supervisory dia- logue, under CRD VI, banks should expect closer scrutiny of concrete indica- tors, including the composition and func- tioning of the management body and its committees, the allocation of roles and responsibilities, and the extent to which effectivechallengeandindependentover- sightareevidencedinboardandcommit- tee documentation. Diminishing scope for flexibility Article 38-1 of the LFS allowed, subject to justification and CSSF approval, an exception to the principle that the chair of the management body in its supervi- sory function shouldnot simultaneously act as CEO. The Bill prohibits simulta- neously exercising the functions of chair of the management body in its supervi- sory function and CEOwithin the same bank and under the EBA Consultation, banks will be restricted from similar overlaps at group level, and should apply robust safeguards (including cool- ing-off periods) when executives move into oversight functions. This will significantly increase the super- visory risk associated with combined roles: banks that still rely on such struc- tures should thus treat governance redesignandsuccessionplanningasapri- ority rather thana theoretical future issue. Mapping responsibilities: governancemust be clearly outlined CRD VI reinforces the need for gover- nance arrangements that are not only effective,butalsoclearlyidentifiablefrom a supervisory perspective, including the requirement for banks to prepare and have readily available a “mapping of responsibilities”. The EBA Consultation states that mapping of responsibilities should include individual role state- ments for members of the management body, seniormanagement andkey func- tionholders, alignedwith reporting lines and decision-making structures. This is not, however, entirely new for Luxembourg banks. Circular 12/552 requires that banksmaintain (i) awritten organisation chart presenting the struc- ture of the different functions (business, support andcontrol) and thehierarchical and functional reporting lines to autho- rised management and the supervisory body, and (ii) written task descriptions setting out the function, powers and responsibilities of the relevant staff, on the basis of segregation of duties. Although many Luxembourg banks generally already hold this information invarious documents, the practical chal- lenge will be to consolidate it into a sin- gle, coherent governance architecture that can be readily provided to the CSSF and kept up to date as structures evolve. Practical takeaways for Luxembourg banks As far as Luxembourg is concerned, from a governance perspective CRD VI should be approached as a governance structuring exercise rather than purely regulatory. Inpractical terms, banks should focuson: - anticipatory planning of appointments andrenewals, including internal suitabil- ity assessments aligned with the future legal framework, and ensuring that key functionholder assessment processes are documented and “supervisor-ready”; - redesigninggovernance structures rely- ing on flexibility that are unlikely to sur- vive the CRDVI/EBAConsultation; - consolidating governance documenta- tion into a clear mapping of duties and individual responsibility statements; and - reassessing independence, reporting and remuneration oversight for internal control functions. CRD VI does not alter the substance of what is expected from well-governed Luxembourg banks. It does, however, raise the standard for how governance must be organised, managed, and evi- denced. 1)Wewouldliketostressthatthepresentarticlehasbeen preparedbasedontheBillinitscurrentversion,whichof coursemaystillbesubjecttofurtheramendmentsduring thecurrentlyongoing legislativeprocess. 2)Directive(EU)2024/1619oftheEuropeanParliament and of the Council of 31May 2024 amending Directive 2013/36/EU as regards supervisory powers, sanctions, third-country branches, and environmental, social and governancerisks. 3) Law of 5 April 1993 on the financial sector, as amended. 4)CSSFCircular12/552oncentraladministration,inter- nalgovernanceandriskmanagement,asamended. 5) Bill of law 8627 implementing CRD VI into Luxembourg law. 6) EBA Consultation Paper on revised Guidelines on internalgovernance(EBA/CP/2025/20). 7) Which is also expected to apply to financial holding companiesandmixedfinancialholdingcompanies. Governance under CRD VI: What will actually change for Luxembourg banks? EmnaRekik , CountryLead -HeadofMarkets chez JLL - Jones LangLaSalle Luxembourg Jeudi 29 janvier de 11h45 à 14h15 Conférence Ecofin Club à l’Hôtel Parc Belle-Vue - Goeres Hotels L'état du marché immobilier : rétrospective 2025 et perspectives 2026 Paf membres : 75€ ttc pp (Apéro networking & lunch 3 services compris). Paf nonmembres : 85€ ttc pp en découverte et max. 1 visite avant adhésion. À verser sur le compte bancaire : BIC - GEBABEBB - IBANBE73 0015 4949 3760 – Réf. 29/01 Lieu : 5Avenue Marie-Thérèse à L-2132 Luxembourg - Parking dans l'hôtel en fonction des disponibilités Info club & devenir membre : www.ecofinclub.lu - didier.roelands@ecofinclub.lu