Luxembourg Financial Regulatory News:
Circular CSSF 25/884, effective April 14, 2025, requires all IFR investment firms to adhere to new guidelines on remuneration policies. The circular’s primary purpose is to apply the EBA Guidelines (EBA/GL/2021/13) for non-SNI IFR investment firms, promoting gender-neutral and sound remuneration policies, including specific rules for governance and committee structures. It also clarifies that small and non-interconnected investment firms (SNI IFRs) must continue to follow the older Circular CSSF 10/437.
Read more at the official link at https://www.cssf.lu/en/Document/circular-cssf-25-884/
Basis and Inspiration for the Circular CSSF 25/884
The Circular CSSF 25/884 is primarily based on the EBA Guidelines on sound remuneration policies under Directive (EU) 2019/2034 (EBA/GL/2021/13). It is also inspired by the need to clarify remuneration requirements for small and non-interconnected investment firms (SNI IFR). The circular’s purpose is to ensure supervisory convergence at a European level.
Scope of Applicability
This Circular CSSF 25/884 applies to:
- All IFR investment firms as defined in the amended Law of April 5, 1993, on the financial sector (LFS).
- Non-SNI IFR investment firms (also known as “Class 2 IF”).
- SNI IFR investment firms (also known as “Class 3 IF”).
Exemptions
The document does not explicitly state any exemptions. However, it clarifies that SNI IFR investment firms shall continue to comply with the provisions of Circular CSSF 10/437 instead of the new EBA Guidelines.
Date of Applicability
This Circular CSSF 25/884 applies with immediate effect as of its publication date, April 14, 2025.
Main Subjects and Domains Covered under Circular CSSF 25/884
The Circular CSSF 25/884’s main subjects are:
- The application of the EBA Guidelines on sound remuneration policies.
- Clarification of remuneration requirements for SNI IFR investment firms.
The main domains covered under Circular CSSF 25/884 are:
- Remuneration policies, including gender neutrality.
- Governance arrangements and the establishment of a remuneration committee.
- The structure of remuneration for specific functions.
High-Level Requirements under Circular CSSF 25/884
- Non-SNI IFR investment firms must comply with the EBA Guidelines, which detail requirements for a sound and gender-neutral remuneration policy for all staff, especially those whose activities have a material impact on the firm’s risk profile.
- SNI IFR investment firms must continue to comply with the provisions of Circular CSSF 10/437.
Main Concerned Functions
The primary functions concerned are those related to Human Resources, Legal, and Compliance, as well as the management and supervisory functions of the investment firms.
List of Required Documents to be Prepared
This Circular CSSF 25/884 does not explicitly require the preparation of new documents; rather, it specifies the policies and practices that firms must have in place.
This news for Circular CSSF 25/884 can be considered beneficial under CSSF-Circulars and Investment Firms News.
The pre-filled example templates for CSSF 25/884 Circular should be available at https://ratiofy.lu/templates/ from Christmas 2025.
