In 2017 the Court of Appeals confirmed a change in position regarding the enforcement of awards annulled in the seat of arbitration. This decision broke with the court's earlier interpretation – which had favoured enforcement and been standard practice since 1999 – and solidified its new approach of denying enforcement when an award does not produce effects in its jurisdiction of origin.
In recent months, the Luxembourg Financial Supervisory Authority (CSSF) has been active and the industry is preparing for the open banking wave. The changes in response to the EU Payment Services Directive aim for a generally positive evolution of the payment scene in Luxembourg. The CSSF has published the fallback exemption request form and adopted several circulars that are applicable to payment service providers.
By way of the Law of 20 July 2018, Luxembourg has finally implemented the EU Payment Services Directive (PSD 2). As the PSD 2 is a full harmonisation directive, most of Luxembourg's PSD 2 provisions are identical to the legal framework implemented across the European Union. Nonetheless, EU member states were given scope to decide on certain topics and the Grand Duchy seized the opportunity to define its own rules.
EU Regulation 655/2014, which established a European Account Preservation Order (EAPO) procedure, aims to facilitate the collection of claims in civil and commercial matters by introducing a uniform EU procedure for identifying and freezing funds held in a debtor's bank accounts in another member state. This increased transparency is a particularly new development for Luxembourg, which recently introduced a straightforward EAPO enforcement procedure that is in line with its existing enforcement measures.
A recent Luxembourg District Court judgment has confirmed the well-established, flexible and creditor-friendly environment offered by the Collateral Act. The court ruled that the enforcement of a pledge cannot be set aside, except in the case of clearly established fraud. The main takeaway from the decision is the confirmation of the possibility offered by the act to enforce a pledge without any payment default and in case of a breach of a financial covenant.
The Luxembourg financial sector regulator (CSSF) recently published a number of circulars in order to streamline its regulation of IT outsourcing in the financial sector and introduce specific rules for the use of cloud services. In doing so, the CSSF has defined the conditions under which financial service providers may outsource activities without infringing the regulatory principles of central administration and sound governance.
The new Markets in Financial Instruments (MiFID) Act, which transposes the Markets in Financial Instruments Directive and implements the EU Markets in Financial Instruments Regulation, was recently voted into law. Most issues relating to markets in financial instruments are covered by the first part of the act, while the provision of investment services will continue to be governed by the Financial Sector Act, as amended by the second part of the MiFID Act.
Following the adoption of Bill of Law 7022, the new Act on Market Abuse recently entered into force. The act significantly increases the administrative and criminal penalties for infringements of market abuse provisions and designates the Luxembourg financial sector regulator as the competent authority for the purposes of the EU Market Abuse Regulation. It also extends the definition of 'regulated information' provided for in the Act on Transparency Requirements for Issuers.
The Luxembourg Stock Exchange (LuxSE) recently introduced a new specific platform for green financial instruments: the Luxembourg Green Exchange (LGX). Although joining the LGX is optional and green securities can be listed on the LuxSE and recognised as green regardless of whether the issuer chooses to join the LGX, having securities admitted to the LGX will increase investor confidence as to their green nature.
The EU Market Abuse Regulation recently came into force in Luxembourg and a new market abuse regime affecting listed companies has been implemented. In addition, a wider set of rules covering the disclosure of inside information, insider list manager transactions and modifications relating to multilateral trading facility (MTF) platforms – including the Luxembourg Euro MTF market – have been introduced.
Updated Luxembourg Stock Exchange (LuxSE) rules and regulations came into force in January 2016 and the LuxSE recently published frequently asked questions (FAQs) regarding the Euro MTF Market rules. The FAQs include information on approvals and the requirements for the different types of security generally issued. They also provide support to practitioners in regards to prospectus approvals and the Euro MTF market listing process.
A new Grand Ducal Regulation has introduced a certified emergency allowance for self-employed workers during the COVID-19 pandemic. The new allowance is available for merchants, artisans and intellectual workers who work as self-employed persons, including insurance agents and brokers, and may be granted regardless of the number of employees.
This article provides information for employers with regard to the government's recommendations in the context of COVID-19. The recommendations include a preference for teleworking, the authorisation of employees to take extraordinary family leave, the use of short-time working to prevent dismissal of full-time employees, the use of quarantine as a preventative measure, the introduction of certificates for frontier workers and the introduction of a new tax measure.
In the event of disputes concerning absences from work, employees must provide proof of their agreement with their employer regarding leave requests; otherwise, their absence may be considered unjustified and could lead to dismissal. In a recent case, the Court of Appeal fully recognised the binding force of internal regulations on employers and employees – provided that the latter are aware of such regulations.
Under certain conditions, frequent absenteeism due to health reasons may constitute a valid reason for dismissal. However, what happens when an employee's absenteeism is linked to depression caused by work stress? A recent Court of Appeal decision considered this issue and shows that dismissal based on frequent absenteeism could, in principle, be considered abusive.
Employees may drink a small glass of alcohol in the workplace, whether at after-work events or professional lunches or during festivities organised by the company. However, what happens if an employee arrives at work intoxicated? The Court of Appeal was recently confronted with such a situation and had to consider the conditions under which an employee's state of intoxication can justify their dismissal.
As the insurability of administrative fines is not specifically provided for by the Insurance Contract Act, it may not be prohibited per se. Nonetheless, the industry is reluctant to offer insurance cover for administrative fines. Given the increasingly high penalties that can be imposed by administrative authorities following the entry into force of the EU General Data Protection Regulation, a legislative response would be appreciated at a supra-national level.
With more than 93% of premiums collected outside the Grand Duchy, Luxembourg life insurance has undeniably contributed to the dynamism of the European passport with regard to both freedom of services and freedom of establishment. Luxembourg life insurance is mainly a passported activity and thus marked by cross-border issues shaped by local developments that require constant monitoring, particularly when it comes to one of the sector's leading products: life insurance linked to investment funds.
The United Kingdom's planned exit from the European Union would result in it losing the fundamental freedoms guaranteed by the Treaty on the Functioning of the European Union and its qualification as an EEA third country. As such, it is timely to examine the regulatory framework governing the Luxembourg activities of (re)insurers registered outside the European Economic Area.