Starting from 1st December 2014, certain financial companies have become subject to reporting obligations to the Banque Centrale du Luxembourg (the "BCL") as a result of the entry into force of the Regulation No 2014/17 dated 21 July 2014 (the "New BCL Reporting Regulation") of the BCL.
What is the background of the reporting obligations?
The Council Regulation (EC) No 2533/98 of 23 November 1998 established the framework of statistical reporting obligations (the "Reporting Obligations") for financial institutions and designated the European Central Bank (the "ECB") as the supervisory authority for collecting these statistics in coordination with all the national central banks (the "NCB"). In order to implement these obligations, the BCL adopted on 29 April 2011 the Regulation No 2011/8 (the "BCL Reporting Regulation"). On 21 July 2014, the BCL adopted the New BCL Reporting Regulation concerning the collection of statistics from financial companies, which amends the BCL Reporting Regulation as from 1st December 2014 (the BCL Reporting Regulation, as amended by the New BCL Reporting Regulation being hereafter referred to as the "Amended BCL Reporting Regulation").
Is your company now subject to the Reporting Obligations to the BCL?
Scope of Application : the definition of financial companies
Until 1st December 2014, the Reporting Obligations to the BCL only applied to a limited category of companies defined by the BCL Reporting Regulation as any company the principal activity of which is to grant loans or issue debt securities or derivative instruments which are sold by public offer or by private investment, in order to finance the activities of its affiliated companies.
The Amended BCL Reporting Regulation defines the financial companies which are now subject to the Reporting Obligations (the "Financial Companies") as any company whose object is:
- to perform any kind of investment in any company;
- to acquire by subscription, purchase, exchange or any other way of securities, shares and other equity instruments, bonds, receivables, certificates of deposits and other debt instruments and in general all financial instruments issued by a public or private entity;
- to directly or indirectly invest in the acquisition and management of a real estate portfolio, of patents or other IP rights of whatever nature or origin;
- to borrow funds in any form; or
- to lend funds to its shareholders, subsidiaries, affiliated companies, and/or any other entity."
The Amended BCL Reporting Regulation provides exemptions to the Reporting Obligations for Financial Companies:
- which are already subject to data collection due to their status including (but not limited to) credit institutions, undertakings for collective investment, venture capital firms (SICAR), insurance and reinsurance companies, and securitisation vehicles; or
- whose balance sheet is below the threshold of EUR 500 million. However, the BCL reserves its right to impose specific reporting obligations on Financial Companies with a balance sheet falling below this threshold.
The BCL may also, by way of reasoned decision, exempt Financial Companies from some Reporting Obligations if such exemption is in the interest of sound administration and in accordance with the principle of equal treatment.
If you fall within the scope of application of the Amended BCL Reporting Regulation, what are your Reporting Obligations?
The Reporting Obligations established by the Amended BCL Reporting Regulation include:
- a general notification : any Financial Company, whose quarterly balance sheet total exceeds EUR 500 million, shall inform the BCL by submitting its most recent annual accounts, if available, within one month after this threshold is exceeded;
- a quarterly statistical balance sheet report: This report must be provided to the BCL on a quarterly basis at the latest 20 working days following the end of the period to which it relates;
- a quarterly report on transactions: This report must be provided to the BCL on a quarterly basis at the latest 20 working days following the end of the period to which it relates; and
- a monthly security by security report: the securities to be included in the security by security reporting are detailed in the model provided by the BCL.
When will the new provisions start impacting your company?
Financial Companies which were already subject to the Reporting Obligations under the BCL Reporting Regulation shall proceed to the first transmission of their reports by 21 January 2015, using the models provided in the Amended BCL Reporting Regulation. Financial Companies which were not subject to the Reporting Obligations under the BCL Reporting Regulation shall undertake their first reporting in accordance with the Amended BCL Reporting Regulation, by 26 June 2015.