Qualifying holdings in the financial sector

In September 2017, the CSSF published a new Circular (Circular 17/669) on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector¹ .

It applies to qualifying holdings in the following entities:

• credit institutions;
• investment firms;
• insurance companies;
• reinsurance companies;
• Central counterparties.

This new Circular follows the publication by ESMA, EBA and EIOPA of joint guidelines ("Guidelines") on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector. (JC/GL/2016/01 of 20 December 2016)

It became applicable on 1 October 2017 and the previous CSSF Circular on that topic (Circular 09/392), was repealed on that date.

The Guidelines further specify certain concepts and in the appendices, (i) a list of information required by the competent authorities for the purpose of evaluating an acquisition or increase in qualified participation, and (ii) practical examples of determination of acquisitions of indirect holdings, are provided.

Where the proposed acquirer is an entity authorised and supervised within the European Union and where the target undertaking meets certain criteria, the information requirements are reduced.