Luxembourg - PSF

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Luxembourg, officially the Grand Duchy of Luxembourg, is a landlocked country in western Europe. Is is bordered by Belgium to the west and north, Germany to the east, and France to the south. Its capital, Luxembourg City, is, together with Brussels and Strasbourg, one of the three official capitals of the European Union and the seat of the European Court of Justice, the highest juridical authority in the EU.

All natural or legal persons who exercise a professional activity within the financial sector are subject by law to authorisation and ongoing regulation by the financial services supervisory authority (Commission de surveillance du secteur financier - CSSF). In addition to banks, the law targets a vast range of "financial sector professionals" known as PSF (to use the French acronym). It distinguishes between three types of activity: the PFS investment firm, "specialised" PSF and "support" PSF.

By "investment firm" is meant investment advisers, brokers in financial instruments, commission agents, wealth managers, professionals acting for their owns account, market makers, underwriters of financial instruments, distributors of units and/or shares in undertakings for collective investment (UCIs), financial intermediation firms and investment firms operating a multilateral trading facility (MTF) in Luxembourg.

The 'specialised PSF" is engaged in financial services activity other than investment. This category includes registrar agents, professional custodians of the financial instruments, operators of a regulated market authorised in Luxembourg, operators of payment or securities settlement systems, currency exchange dealers, debt recovery, professionals carrying on lending operations, professionals carrying on securities lending operations, professionals providing fund transfer services, administrators of collective savings funds, managers of non-coordinated UCIs and professionals providing company formation and management services

A third group, "support PSF" refers to any firm pursuing and activity related to, or complementary to, a financial sector activity. This category covers company domiciliation agents, client communication agents, administrative agents of the financial sector, primary IT systems operators of the financial sector, secondary IT systems and communication networks operators of the financial sector.

Investment firms are eligible for the European passport, permitting them to offer their services throughout the European Union once they have obtained authorisation in one Member State. This privilege does not apply to specialised PSF and support PSF.

By regulating and supervising a wide range of technical, administrative and communications related activities, the government seeks to facilitate the outsourcing of non-core activities by ensuring a high quality of service and professional confidentiality.

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