Law of 5 April 1993 on the financial sector, as amended

1 This consolidated text was drawn up by the CSSF for information purposes only. In case of discrepancies between the French and the English consolidated texts, the texts published in the Journal officiel du Grand-Duch de Luxembourg are the sole authoritative and universally valid versions. Law of 5 April 1993 on the financial sector, as amended Art. 1 Definitions ..22 Art. 1-1 Scope ..32 PART I: ACCESS TO PROFESSIONAL ACTIVITIES IN THE financial SECTOR .. 35 CHAPTER I: AUTHORISATION OF BANKS OR CREDIT INSTITUTIONS ESTABLISHED UNDER LUXEMBOURG LAW..35 Section 1: Provisions of general application ..35 Art. 1-2 Scope.

2 35 Art. 2 Authorisation requirement ..35 Art. 2-1 Specific requirements for authorisation of undertakings referred to in point (1)(b) of Article 4(1) of Regulation (EU) No 575/2013 ..35 Art. 3 Authorisation procedure ..36 Art. 4 The legal form of the institution ..38 Art. 5 Central administration and infrastructure ..38 Art. 6 Shareholdings ..38 Art. 7 Professional repute and experience ..42 Art. 8 Capital base ..43 Art. 9 (repealed by the Law of 13 July 2007) ..44 Art. 10 External auditing ..44 Art. 10-1 Fonds de Garantie des D p ts Luxembourg membership ..44 Art. 10-2 Syst me d'Indemnisation des Investisseurs Luxembourg membership.

3 44 Art. 11 Withdrawal of authorisation ..44 Section 2: Specific provisions relating to caisses rurales [rural banks] ..45 Art. 12 Special provisions relating to caisses Section 3: Specific provisions relating to banks issuing covered bonds ..46 Subsection 1: Definitions, activities of a bank issuing covered bonds and protection of the denomination of covered bonds ..46 Art. 12-1 Definition of the main object of a bank issuing covered bonds ..46 Art. 12-2 Definition of incidental and ancillary activities of a bank issuing covered bonds ..48 Art. 12-3 Technical definitions ..50 Art. 12-4 Specific arrangements.

4 53 Subsection 2: Collateral of covered bonds, control by a special r viseur (auditor) and the preferential right of covered bond holders ..53 Art. 12-5 Collateral ..53 Art. 12-6 Collateral register and transparency ..56 Art. 12-7 Audit by a special r viseur d'entreprises agr (approved statutory auditor) 56 Art. 12-8 Preferential right of covered bond holders ..57 Subsection 3: Administration of a bank issuing covered bonds in case of suspension of payments and winding up ..57 Art. 12-9 Creation of patrimonial compartments (compartiments patrimoniaux) and maintenance of the authorisation of a bank issuing covered bonds with limited business activity.

5 57 Art. 12-10 Administration of the patrimonial compartments of a bank issuing covered bonds with limited business activity ..58 Art. 12-11 Suspension of payments of a patrimonial compartment ..60 Art. 12-12 Dissolution and winding up of a patrimonial compartment ..60 Section 4: (repealed by the Law of 10 November 2009) ..61 CHAPTER 2: AUTHORISATION OF PFS ..61 Section 1: General provisions ..61 Art. 13 Scope ..61 Art. 14 Authorisation requirement ..61 Art. 15 Authorisation procedure ..61 Art. 16 The legal form of the entity ..63 Art. 17 Central administration and infrastructure ..63 2 Art. 18 Shareholders ..64 Art.

6 19 Professional standing and experience ..68 Art. 20 Capital base and own assets ..69 Art. 21 (repealed by the Law of 13 July 2007) ..70 Art. 22 External auditing ..70 Art. 22-1 Participation in the Syst me d'Indemnisation des Investisseurs Luxembourg 71 Art. 23 Withdrawal of authorisation and voluntary winding up ..71 Section 2: Specific provisions relating to certain categories of PFS ..72 Subsection 1: Investment firms ..72 Art. 24 (repealed by the Law of 21 July 2021: A566) ..72 Art. 24-1 Reception and transmission of orders in relation to one or more financial instruments ..72 Art. 24-2 Execution of orders on behalf of clients.

7 72 Art. 24-3 Dealing on own account ..72 Art. 24-4 Portfolio management ..72 Art. 24-5 Investment Art. 24-6 Underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis ..73 Art. 24-7 Placing of financial instruments without a firm commitment basis ..73 Art. 24-8 Operation of an MTF ..73 Art. 24-9 Operation of an OTF ..73 Subsection 2: Specialised PFS ..74 Art. 25 Registrar agents ..74 Art. 26 Professional depositaries of financial instruments ..74 Art. 26-1 Professional depositaries of assets other than financial instruments ..74 Art. 27 Operators of a regulated market authorised in Art.

8 28 (repealed by the Law of 2 August 2003) ..75 Art. 28-1 (repealed by the Law of 10 November 2009) ..75 Art. 28-2 (repealed by the Law of 21 July 2021: A566) ..75 Art. 28-3 Debt recovery ..75 Art. 28-4 Professionals performing lending operations ..75 Art. 28-5 Professionals performing securities lending ..76 Art. 28-6 Family Offices ..76 Art. 28-7 Mutual savings fund administrators ..76 Art. 28-8 (repealed by the Law of 12 July 2014) ..77 Art. 28-9 corporate domiciliation agents ..77 Art. 28-10 Professionals providing company incorporation and management Subsection 2a: Special provisions applicable to central account keepers.

9 78 Art. 28-11 Central account Art. 28-12. Authorisation conditions ..78 Art. 28-13. Authorisation procedure ..79 Subsection 3: Support PFS ..79 Art. 29-1 Client communication agents ..79 Art. 29-2 Administrative agents of the financial sector ..80 Art. 29-3 IT systems and communication networks operators of the financial sector ..80 Art. 29-4 (repealed by the Law of 21 July 2021: A566) ..81 Art. 29-5 Dematerialisation service providers of the financial sector ..81 Art. 29-6 Conservation service providers of the financial sector ..81 Subsection 4: repealed by the Law of 21 July 2021: A566 ..81 Chapter 2a: Special provisions applicable to APAs and ARMs.

10 82 Art. 29-7 Authorisation procedure ..82 Art. 29-8 Reporting of infringements ..82 Art. 29-9 Transmission of data to an APA or an ARM ..82 CHAPTER 3: AUTHORISATION FOR THE ESTABLISHMENT OF BRANCHES AND FREEDOM TO PROVIDE SERVICES IN LUXEMBOURG BY CREDIT INSTITUTIONS OR PFS GOVERNED BY FOREIGN LAW ..83 Art. 30 Community credit institutions and investment firms ..83 Art. 31 Community financial institutions ..83 Art. 32 Third-country credit institutions and PFS incorporated under foreign law other than investment firms ..84 3 Art. 32-1 Third-country firms providing investment services or performing investment activities.