Luxembourg Investment Services Law (Amendment)
Law of 12 March 1998
– modifying the Law of 5 April 1993 regarding the financial sector for the purpose of rearranging the Directive 93/22/CEE ‘investment services’
– modifying Article 113 of the Commercial Code
(Loi du 12 mars 1998 - modifiant la loi du 5 avril 1993 relative au secteur financier aux fins de transposer la directive 93/22/CEE 'services d'investissement' - modifiant l'article 113 du Code de Commerce)
[English Translation of the Content and Articles 13, 16, 21, 25, 32, etc.]
Articles 13 to 38 of the Law of 5 April 1993 regarding the financial sector shall be replaced by the following provisions:
Approval by other professionals of the financial sector of Luxembourg law
Article 13 Field of application
(1) This chapter applies to all the juridical persons under the Luxembourg law exercising activities of financial sectors in the professional capacity except for the juridical persons mentioned in Paragraph (2) of this article. Those “other professionals of the financial sector” so defined may be referred to as “PSF.”
Such persons are called investment businesses when they exercise in the professional capacity the activities consisting of providing investment services for third parties. [……]
(2) This chapter does not apply:
- to the credit organizations that are subject of the preceding chapter;
- to the advisors and administrators of Luxembourg OPC that are subject of the Law of 30 March 1988 regarding the organizations of collective investment (OPC) or the Law of 19 July 1991 concerning the organizations of collective investment of which securities are not appropriated to the investment in the public.
Article 14 Necessity of Approval
Article 15 Procedure of Approval
Article 16 Legal form of establishment
Approval for the activities that involve the management of funds of third parties may only be granted to juridical persons having the form of an organization under public law or of a commercial company.
Article 17 Central administration and infrastructure
Article 18 Shareholders
Article 19 Honorability and professional experience
Article 20 Financial basis
Article 21 Sufficient credit
Approval shall be subject to vindication of sufficient credit in accordance with the activity program.
Article 22 External revision
Article 23 Withdrawal of the Approval
Section 2 Special provisions to certain categories of PSF
Article 24 Investment businesses
A) Commission agents
B) Wealth managers
C) Professionals intervening on the behalf
D) Distributors of parts of OPC
Article 25 Financial advisors
(1) Financial advisors are professionals whose activities consist of providing advisory services on individual basis on the financial operations, especially on the investments.
(2) Financial advisors shall be remunerated only by their clients. They are not allowed to intervene directly or indirectly in the execution of the advice they provide.
(3) Activity of mere information is not the subject of the present law.
Article 26 Dealers
Article 27 Market makers
Article 28 Professional custodians of securities or other financial instruments
Article 29 Persons carrying out operations of change-espece
Article 29bis Recovery of claims
Chapter 3 Approval for establishment of branch offices and for free provision of services in Luxembourg by credit organizations or PSF under foreign law
Article 30 Credit organizations and investment businesses with the origin in European Community countries
Article 31 Financial institutions with the origin in European Community countries
Article 32 Credit organizations and investment businesses with the origin other than European Community countries; PSF other than investment businesses with the origin in European Community or other countries
Chapter 4 Approval for establishment of branch offices and for provision of services in other State members of European Community by credit organizations, investment businesses or certain financial institutions under Luxembourg law
Article 33 Establishment of branch offices in countries of European Community
Article 34 Provision of services in countries of European Community
Part Two Professional obligations, prudential rules and rules of conduct in the financial sector
Article 35 Field of application
Article 36 Prudential rules of the financial sector
Article 36bis Prudential rules specific for certain PSF
Article 37 Rules of conduct of the financial sector
Article 37bis Participation in the indemnification system of investors
Article 38 Definition of laundering
In Chapter 1 of Part Three of the Law of 5 April 1993 regarding the financial sector, Articles 42 and 44 shall be replaced by the following provisions.
Article 42 Competent authority
Article 44 Professional secrecy of IML
Chapter 2 of Part Three of the Law of 5 April 1993 regarding the financial sector shall be replaced by the following provisions.
Chapter 2 Supervision of the credit organizations, certain financial institutions and investment businesses doing their activities in several countries of European Community
Article 45 Power for supervision of the credit organizations and investment businesses doing their activities in several countries of European Community
Article 46 Manners of supervision of the credit organizations and investment businesses doing their activities in several countries of European Community
Article 47 Supervision for certain financial institutions with the origin in countries of European Community
Article Four Modifying provisions
*This is just an unofficial translation of a part of the law. For an original, complete text, visit the government’s site.
àBooks on Luxembourg [Business Law, Investment, etc.]