LUXEMBOURG Law and Practice Contributed by: Vassiliyan Zanev and Natalja Taillefer, Loyens & Loeff Luxembourg S.à r.l.
Where the originator, sponsor or original lender has not agreed who will retain the material net economic interest, the latter must be retained by the originator. For the purposes of the risk- retention provisions set out in the Securitisation Regulation, an entity shall not be considered to be an originator where it has been established or operates for the sole purpose of securitising exposures. The regulatory technical standards specifying in greater detail the risk-retention requirements for originators, sponsors, original lenders, and ser - vicers are included in the Commission Delegated Regulation (EU) 2023/2175 of 7 July 2023. Institutional investors investing in securitisation positions are required in the course of their man - datory due diligence to verify whether these risk- retention formalities have been complied with. Aside from the risk-retention regime estab - lished by the Securitisation Regulation, alterna - tive investment funds (AIFs) that fall within the scope of the AIFMD and that originate loans will be subject to certain risk-retention formalities, once the Directive (EU) 2024/927 of the Euro - pean Parliament and of the Council of 13 March 2024 amending Directives 2011/61/EU (AIFMD 2.0) is implemented in Luxembourg. These risk- retention requirements will thus apply to the loans originated and subsequently transferred by an AIF, and that irrespective of whether the purchaser of such loan is an SSPE, within the meaning of the Securitisation Regulation. Enforcement of the Securitisation Regulation The CSSF and the Luxembourg Authority for the Insurance Sector (CAA) (the latter only with regard to the entities generally submitted to its supervision) are the competent authorities in Luxembourg to ensure compliance by the origi -
nators, original lenders and SSPEs established in Luxembourg with Articles 6 to 9 of the Secu - ritisation Regulation (ie, risk retention, trans - parency requirements, ban on re-securitisation and criteria for credit-granting), as well as with the simple, transparent and standardised (STS) securitisations framework. The penalties for non-compliance with the above risk-retention requirements are set out in the SR Law. Pursuant to the SR Law, the CSSF and the CAA may, within their respective compe - tences, impose administrative sanctions in the event of an infringement (ranging from a public statement regarding the identity of the infringing person and the nature of the infringement to a monetary fine). The CSSF and the CAA also enjoy certain inves - tigative powers and may refer information to the State Prosecutor for criminal prosecution. 4.4 Periodic Reporting Statistical Reporting for All Securitisation Undertakings All Luxembourg securitisation undertakings are subject to reporting obligations pursuant to Circular 2014/236 of the Luxembourg Central Bank (LCB) and Regulation (EU) No 1075/2013 of the European Central Bank (ECB) of 18 Octo - ber 2013 concerning statistics on the assets and liabilities of financial vehicle corporations engaged in securitisation transactions, consist - ing of an initial registration obligation with the LCB, as well as ongoing reporting obligations (eg, liquidation or major changes in the informa - tion provided at the registration). Securitisation undertakings whose balance sheet exceeds cer - tain thresholds will also need to comply with the periodic reporting obligations towards the LCB, including quarterly reports and monthly reports.
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