Loan origination - CSSF guidance on private lending

On 15 June 2021, the Luxembourg Financial Sector Supervisory Authority (the CSSF) updated its FAQs on the statuses of the Professionals of the Financial Sector (PSFs) by issuing clarifications on lending activities falling out of scope of the authorisation requirement, laid down by article 28-4 of the Law on Financial Sector (the LFS)[1].

As a general rule under article 28-4 of the LFS, professionals (other than credit institutions) performing lending operations are those who "engage in the business of granting loans to the public for their own account".

As the notion of "public" is not legally defined, the CSSF stated that it will not consider professional lending activities as public-oriented, should the following conditions be met:

  • loans are granted to a limited circle of previously determined persons (as opposed to a multitude of non-identifiable persons)[2];
  • the nominal value of the loan amount is at least EUR 3,000 (or an equivalent in another currency); and
  • loans are granted solely to professionals, as defined in the Luxembourg Consumer code[3].
  • Further to the above, the professional character of the credit activity will be assessed based on whether it is performed repetitively, with the exclusion of one-off operations.

Finally, the CSSF has highlighted the non-application of the article 28-4 of the LFS to professionals carrying out activities whose taking up and pursuit are governed by special laws, including notably UCIs, SIFs, pension funds, SICARs and securitisation undertakings.


[1] Law of 5 April 1993 on the financial sector, as amended.

[2] Applicable also if granted through a Luxembourg SPV by an entity holding 100% or having (in)direct control over it.

[3] Any natural or legal person, public or private, who acts, including through an intermediary acting in his name or on his behalf, for the purposes falling within the scope of his commercial, industrial, artisanal or liberal activity.

Related : Ogier ( Anne-Gaëlle Delabye ,  Mr. Benoît Rose )

[+ http://www.ogier.com]

 Anne-Gaëlle Delabye Anne-Gaëlle Delabye
[email protected]
Mr. Benoît Rose Mr. Benoît Rose
[email protected]

All articles Banking law

Lastest articles Banking law

CSSF guidance on virtual assets

On 29 November 2021, the Commission de Surveillance du Secteur Financier (the “CSSF”), the Luxembour...

CSSF guidance on virtual assets Read more

Commission’s proposal for a Regulation amending the ELTIF Regulation

On 25 November 2021, the European Commission published a proposal for a regulation amending the Regulation (EU) 2015/760 o...

Read more

Virtual assets: CSSF guidance and FAQs

Further to its recent communications on financial innovation, the Commission de Surveillance du Secteur Financier&nbs...

Read more

Strengthening the integration and efficiency of capital markets to support economic growth

Today, on 25 November 2021, the EU Commission published a package of legislative proposals. With the proposed measures, th...

Strengthening the integration and efficiency of capital markets to support economic growth Read more

Lastest articles by Anne-Gaëlle Delabye

Parallel structures: the Luxembourg solution

Parallel investment funds have increasingly become a preferred structure for sophisticated private equity fund managers se...

Read more

CSSF fast-track procedure for fund managers to comply with SFDR disclosure rules

The Commission de Surveillance du Secteur Financier (the CSSF), has issued a communication (the CSSF C...

Read more

FCA communication to Luxembourg-based entities about the UK temporary permissions regime

On 19 November 2020 the Luxembourg supervisory authority for the financial sector, the CSSF, issued press release 20/...

Read more

CSSF on mandatory notifications in a no-deal Brexit context

Following the publication of Luxembourg laws of 8 April 2019[1] (see our previous briefing here), the Luxembourg...

Read more

Lastest articles by Mr. Benoît Rose

CSSF: Marketing of Foreign UCIs other than the closed-ended type to retail investors in Luxembourg

On 23 December 2020, the Luxembourg financial sector supervisory authority (the CSSF) published the Regulation N°...

Read more

CSSF: ESMA guidelines on liquidity stress testing in UCITS and AIFs

In the midst of the COVID-19 crisis, liquidity risk management is certainly a topical question, as it is meant to prepare ...

Read more

Luxembourg becomes first European country to launch a sustainability bond framework

The Luxembourg Ministry of Finance announced on 2 September 2020 that the country had become the first European country to...

Read more

CSSF prohibition of loan investments for UCITS

On 7 August 2020, the Luxembourg supervisory authority for the financial sector, the CSSF, updated its frequently asked qu...

Read more

LexGO Network