New filing procedure with the RCS

On 21 December 2011, the Grand-Ducal Regulation of 14 December 2011 determining the procedure for filing of the “accounting package” with the Commercial and Companies Register as well as the conditions for consistency and computation checks on the annual accounts and amending the Grand-Ducal Regulation of 23 January 2003 implementing the Law of 19 December 2002 on the commercial and companies register and on the accounting records and annual accounts of undertakings, as amended, was published in the Mémorial A 262.

This Regulation forms part of the general procedure aiming to simplify administrative burdens for businesses. Its purpose is to define:

• the procedure for filing,
• the form in which the accounting documents shall be lodged with the Commercial and Companies Register (hereinafter the “RCS”), and
• the circumstances under which such financial data may be subject to consistency and computation checks.

The main features of the new filing procedure with the RCS are the following:

1. The procedure applies to all documents concerned, namely to the annual accounts, the trial balance as laid down in the Standard Chart of Accounts and all other documents to be filed in this context (certificates, notifications for publication in the Mémorial, etc.). All these documents together shall be called the "accounting package".
2. For companies subject to the obligation to file their trial balance as laid down in the Standard Chart of Accounts (undertakings referred to in Article 1 of the Grand-Ducal Regulation of 10 June 2009, as set out in the summary table), the filing is made in two stages.
   In the first stage, the documents are prepared as electronic files for filing purposes. To this end, the Luxembourg government provides companies a platform called “eCDF” for electronic collection of financial data which is managed by the Centre des technologies de l'information de l'Etat (CTIE).
   In the second stage, the electronic files are transferred via the website of the RCS, once the preparation of documents as electronic files containing structured accounting information is complete and validated.
3. For companies not subject to the obligation to file their trial balance as laid down in the Standard Chart of Accounts, only the second stage is applicable.

The entry into force of this Regulation is immediate, meaning that:

• as from January 2012, the annual accounts are filed with the RCS exclusively by electronic means, also in case of late filing of the accounts of prior financial years.
• the obligation to prepare and transfer financial data using the platform eCDF shall however apply only to the data of the financial years ended 31 December 2011 or after that date.

Enforcement of the 2011 reporting obligations for issuers subject to the Transparency Law

On 6 January 2012, the Commission de Surveillance du Secteur Financier (“CSSF”) issued press release 12/02 on the enforcement of the 2011 reporting obligations for issuers of securities subject to the Transparency Law.

With this press release, the CSSF wishes to draw the attention of those issuers who prepare their financial statements in accordance with International Financial Reporting Standards (IFRS), to various topics and issues which will be specifically monitored during its 2012 enforcement review campaign.

The CSSF emphasises that it will be particularly vigilant regarding disclosures about risks that arise from financial instruments as well as concerning issues related to the valuation and potential impairment of assets, mainly of:

• financial instruments, with in-depth monitoring of exposures to sovereign debt (see CSSF press release 11/44 of 29/11/2011);
• non-financial assets, with specific attention given to the accounting treatment of deferred tax assets on losses carried forward and impairments on tangible and intangible assets, including goodwill.

The reviews will focus as much on the recognition and measurement of these valuations and potential impairments as on the disclosures in the financial statements related to the methods and assumptions used.

Moreover, the CSSF emphasises that it will monitor, in particular, the implementation of recently introduced standards (such as IFRS 8 and IFRS 3) as well as the format and the content of management reports.

UCIs: mergers, master-feeder structures and notification

On 13 January 2012, the CSSF Regulation No 11-04 amending CSSF Regulation N° 10-5 transposing Commission Directive 2010/44/EU of 1 July 2010 implementing Directive 2009/65/EC of the European Parliament and of the Council as regards certain provisions concerning fund mergers, master-feeder structures and notification procedure was published in the Mémorial A 005.

This Regulation has no real impact; it makes purely formal amendments to the reference to legal basis (ad hoc articles of the Law of 17 December 2010 and Directive 2009/65/EC).

STRs no longer to be copied to the CSSF

On 15 December 2011, the CSSF issued Circular 11/528 on the abolition of the transmission to the CSSF of suspicious transaction reports regarding potential money laundering or terrorist financing.

This Circular repeals point 137 of CSSF Circular 08/387 combating money laundering and terrorist financing. Financial services professionals are no longer required to systematically transmit to the CSSF the information that they communicate to the Financial Intelligence Unit (“FIU”) based on Article 5(1) of the Law of 12 November 2004.

Nevertheless, professionals shall continue copying to the CSSF any information transmitted to the FIU based on Article 5(1) of the Law of 12 November 2004 regarding a suspect who is a professional subject to the CSSF’s supervision, or who is, according to their knowledge, a member of the personnel or internal bodies of such a professional or where this information is likely to have a more material impact on the financial services industry.

CSSF requirements for AML/CTF risk analysis

On 22 December 2011, the CSSF issued Circular 11/529 concerning the risk analysis regarding the fight against money laundering and terrorist financing (AML/CTF). This CSSF Circular details the application of Article 3(3) of the Law of 12 November 2004 as amended by the Law of 27 October 2010 (the “Law”) which states that “Professionals must analyse the risks related to their activities. They must record in writing the conclusions thereof.” Two steps must be followed:

• identify AML/CTF risks and elaborate a methodology to categorise these risks;
• define and implement measures to mitigate these risks.
  1. Identification of money laundering/ terrorist financing risks
     The most frequent types of risks concern country risk or geographical risk, customer risk and product or service risk. Each professional shall design its own risk weighting methodology but cannot ignore the cases identified as high risk as per Article 3-2 of the Law, Article 3 of Grand-Ducal Regulation of 1 February 2010.
     - Risks related to the nature of clients:
     • geographical origin;
     • activity/profession;
     • means of entering into business relationship;
     • complexity and transparency of the investor structure;
     • clients for which Enhanced Due Diligence is required (PEPs, etc.);
     • clients for which Simplified Due Diligence is applicable;
     • others, according to professional judgment.
     - Risks related to the nature of products and services:
     • volume and frequency of transactions;
     • possibility to use suspense accounts;
     • relations with correspondent banks;
     • transfers from or to non-equivalent countries;
     • services to occasional customers;
     • products allowing anonymity;
     • hold-mail accounts;
     • new or unusual products considering initial profile;
     • others, according to professional judgment.
  2. Money laundering/ terrorist financing risk mitigation measures
     Implemented AML/CTF measures must be detailed at 2 levels, for example:
     - acceptance of new business relationships;
     - regularisation of incomplete files;
     - blocking of accounts ;
     - account closing process;
     - regular review procedure of business relationships;
     - detection system of suspicious, unusual, or complex transactions;
     - name matching system;
     - country matching system;
     - client database maintenance;
     - staff awareness and training;
     - cooperation with the CSSF and the FIU;
     - corporate governance.

Annual survey of deposits and claims guaranteed by the AGDL

CSSF Circular 12/530 on the annual survey by the CSSF of the deposits and claims (instruments and monies) guaranteed by the Association pour la Garantie des Dépôts, Luxembourg (Luxembourg deposit guarantee scheme, AGDL) was published on 11 January 2012.

The CSSF invites member institutions to transmit the necessary data on guaranteed cash deposits and claims (instruments and monies) as at 31 December 2011 by 31 March 2012 at the latest.