LUXEMBOURG Law and Practice Contributed by: Andreas Heinzmann, Valerio Scollo and Angela Permunian, GSK Stockmann
funds, different licensing requirements apply. Only entities authorised as credit institutions may receive deposits or other receivables from the public and grant credits for their own account. Other alternative sources of funds for fiat loans include securitisation and crowdfunding. Securitisation Luxembourg is one of the leading European centres for securitisation with a comprehensive and market-friendly legal framework. Although securitisation vehicles are exempt from the requirement to be authorised as professionals performing lending operations, authorisation by the CSSF is required if the securitisation vehicle funds its activities by issuing financial instru - ments to the public on a continuous basis. Crowdfunding Crowdfunding can be a source of fiat loans, particularly through peer-to-peer lending. Loans funded through lending-based crowdfunding platforms benefit from the newly established legal framework. The EU Crowdfunding Regula - tion provides a harmonised EU framework for crowdfunding services provided to non-con - sumer project owners relating to offers for an amount of up to EUR5 million calculated over a period of 12 months per project owner. The provision of crowdfunding services is subject to a licence as European Crowdfunding Service Provider (the ESCP) and prudential supervision by the CSSF. 4.4 Syndication of Fiat Currency Loans Syndication of fiat currency loans provided by fintech companies is currently not market prac - tice in Luxembourg. Loan syndication is typically used to finance larger – scale projects such as company takeovers, property projects or signifi - cant investment projects. These extensive and
complex financings typically involve legacy play - ers.
5. Payment Processors 5.1 Payment Processors’ Use of Payment Rails
Payment processors can either use existing pay - ment rails or alternatively create their own pay - ment rails. However, in the latter case specific licensing requirements apply. 5.2 Regulation of Cross-Border Payments and Remittances Luxembourg is part of the single euro payments area (SEPA), which aims to create a single euro payments area in which all scriptural (book) pay - ments are considered as domestic; ie, without any distinction between national and cross-bor - der payments. With regard to large-value trans - actions, these are currently processed through the T2 system, which settles cross-border pay - ments in euros in real time. When it comes to the regulation of cross-border payments, Luxembourg has implemented the Cross-Border Payment Regulation (CBPR2), Directive (EU) 2015/2366 on payment services (PSD2) (see 11.1 Regulation of Open Banking ), and the SEPA Regulation. These rules integrate the EU payment market, enhancing the security of payment transactions and the regulation of cross-border payments. Additionally, AML/CFT standards require companies to verify identities, detect suspicious activities, ensure the legitima - cy, monitoring of cross-border transactions, and sanction screenings.
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