CSSF Circular 24/853 : New rules for the framework of the IF and their REA

At a glance

On 7 February 2024, the CSSF published Circular 24/853 revising the Long Form Report (LFR) framework that applies to Investment Firms (IF), and amending Circular CSSF 03/113 regarding the practical rules for IF’s Réviseurs d'Entreprises Agréés (REA) for closings as at 31 December 2023.

The self-assessment questionnaire (SAQ) must now be completed on the CSSF’s digital eDesk platform and submitted within 4 months of the IF’s accounts closing date, and the corresponding REA reports within 7 months of closing for 2023.

A closer look

The new Circular 24/853 replaces PSF IF’s previous LFR with a digital reporting solution, the self-assessment questionnaire (SAQ), available on the CSSF’s eDesk platform.

The SAQ is due within 4 months of the IF’s closing date for the financial year ending 31 December 2023. It has three main sections that require quantitative and qualitative data to be reported annually.

CSSF Circular 24/853 also requires REA to prepare:

• An agreed-upon procedures (AUP) report (per the revised ISRS 4400), covering a sub-set of Markets in Financial Instruments Directive (MiFID) relevant information (on a 3-year cycle);
• The MiFID report, covering the protection of financial instruments and funds belonging to clients; and
• An AML/CFT report, covering the IF’s relevant internal procedures.
  
  

These REA reports must be submitted by the REA to the IF, which then submits the reports to the CSSF. They should be transmitted to the CSSF within 6 months after the end of the financial year, except for the financial year ending on 31 December 2023, where the reports should be transmitted within 7 months.

Applicability and scope:

- Financial year ending 31 December 2023:

     Some IF will be subject to the revised LFR:

• In-Scope Class 2 IF: All non-SNI IFR as defined by Article 1. 92-a of the LFS incorporated under Luxembourg law (including branches); and
• In-Scope Class 3 IF: Certain SNI IFR selected by the CSSF and having been informed of their requirement to submit a revised LFR.
• Other investment firms, i.e., Class 3 IF that are out of scope of the revised LFR, are required to submit the LFR in accordance with Circular CSSF 03/113.

- Financial year ending after 31 December 2023:

    All IFs will be subject to the revised LFR.

The revised LFR applies to IF on an individual basis, i.e., no consolidated revised LFR is required if the IF is supervised on a consolidated basis by the CSSF.

How Deloitte can help

Completing the SAQ can be challenging due to its novelty, the technical skills required and a lack of resources, whether time or personnel.

Deloitte can support your firm with this regulatory change, tailored to your unique setup: