CSSF Guidelines for PSF License Free Lending Business – Finance and Banking



Luxembourg: CSSF Guidelines for PSF Licensed Loan Business

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CSSF provides industry sectors with helpful guidance on the scope of lending activities that do not require a financial sector professional’s license.

On June 15, 2021, the CSSF announced the publication of an adaptation of its FAQ on PFS statuses in relation to the PFS status in relation to the provision of loans to the public (Article 28-4 of the Law of April 5, 1993 Financial Sector (“LFS“)).

The CSSF points out in its press release that Article 28-4 of the OPC is directed at professionals whose business it is to provide loans to the public at their own expense. Given the growing number of position requests regarding the interpretation of the term “public” and the question of when CSSF considers lending to be directed to the public, CSSF has updated the FAQ (Part II, question 52). in order to provide clarification and legal certainty.

In the absence of a legal definition of the term “public” in the SDO, CSSF considers that lending is not directed to the public if:

  • loans are provided to a limited number of predetermined persons; or
  • the nominal value of the loan is at least EUR 3,000,000 (or the equivalent in another currency) and the loans are granted exclusively to professionals as defined in article L. 010-1. 2) Consumer Code.

In all other cases, CSSF will evaluate on a case-by-case basis.

We believe this clarification will provide additional regulatory certainty to loan originators and confirm the practices of most industry players in recent years.

The content of this article is intended to provide general guidance on the subject. You should seek professional advice regarding your specific circumstances.

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