Any person who proposes to acquire directly or indirectly a qualifying holding (>10% in voting rights or capital) in a Luxembourg bank, insurance company, management company (authorised under chapter 13 of the 2002 Luxembourg Law on undertakings for collective investment) or other professional of the financial sector is subject to prior notification to the relevant Luxembourg authorities. Prior notification is also required if the voting rights or capital held reach, exceed or fall below 20%, 33 1/3% and/or 50%.
On 21 March 2009 the Luxembourg Law of 17 July 2008 on acquisitions in the financial sector implementing Directive 2007/44/EC came into force. It amends both the Law of 5 April 1993 on the financial sector and the Law of 6 December 1991 on the insurance sector in relation to notification procedures.
The CSSF (Commission de Surveillance du Secteur Financier) and the CAA (Commissariat aux Assurances), the Luxembourg regulator for the financial sector and the Luxembourg regulator for the insurance sector respectively, have decided to apply the guidelines published by CEBS, CESR and CEIOPS in relation to the implementation of Directive 2007/44/EC. This results from CSSF Circular 2009/392 released on 4 February 2009 and from a CAA note dated 20 March 2009 (a CAA circular should provide further details in the coming months).
5 criteria for the assessment
Directive 2007/44/EC, as implemented in Luxembourg, lays down 5 criteria to be considered by the competent authorities to make a proportionate assessment of an application, namely:
- reputation of the proposed acquirer;
- reputation and experience of those who will direct the business;
- financial soundness of the proposed acquirer;
- compliance with prudential requirements; and
- absence of suspicion of money laundering or terrorist financing.
The guidelines aim at harmonising the implementation of Directive 2007/44/EC throughout the European Union notably by providing a list of the information to be made part of any application.
New list of information to be provided by potential acquirers
Annex II to the guidelines provides for an exhaustive list of the information to be filed by any potential acquirer of a qualifying holding in a Luxembourg supervised entity.
- The information to be provided varies depending on the level of the shareholding to be acquired:
- basic information to be provided for holdings between 10% and 20%;
- additional information to be provided for holdings between 20% and 50%;
- comprehensive information to be provided for change of control.
Assessment period
Any potential acquirer must file a notification with the regulator prior to the acquisition. During the assessment period the relevant regulator may approve or disapprove the contemplated acquisition. In the event that by the end of such period the competent authority has not notified its disapproval, the operation is deemed approved.
The maximum assessment period is 82 working days in aggregate if the acquirer is a EEA regulated entity or 92 working days otherwise. Such period shall start from the day of notification provided the application is deemed complete.
Such maximum period is to be computed as follows:
- the competent authority has 2 working days from notification to acknowledge receipt (provided notification is deemed complete);
- the competent authority has normally 60 working days from such acknowledgement to approve or disapprove;
- until the 50th working day of the assessment period, the regulator may request for additional information which may extend the assessment period by 20 working days if the acquirer is a EEA regulated entity or 30 working days otherwise.
For further information, please contact any of the members of the Investment Management Group named below:
Freddy Brausch, Partner, Linklaters LLP, Luxembourg on (352) 26 08 1 or freddy.brausch@linklaters.com
Francine Keiser, Partner, Linklaters LLP, Luxembourg on (352) 26 08 1 or
francine.keiser@linklaters.com
Hermann Beythan, Partner, Linklaters LLP, Luxembourg on (352) 26 08 1 or
hermann.beythan@linklaters.com
Emmanuel-Frédéric Henrion, Partner, Linklaters LLP, Luxembourg on (352) 26 08 1 or
emmanuel-frederic.henrion@linklaters.com
