Two European Securities and Markets Authority reports detailed the penalties issued by national regulators across the EU, in accordance with Ucits and AIFMD rules. Photo: European Securities and Markets Authority

Two European Securities and Markets Authority reports detailed the penalties issued by national regulators across the EU, in accordance with Ucits and AIFMD rules. Photo: European Securities and Markets Authority

Luxembourg’s financial regulator, the CSSF, levied half-a-million euros worth of fines on investment fund firms last year, according to EU figures released this week.

Luxembourg’s financial regulator issued total penalties of €504,963 in 2022 under Ucits retail fund and Alternative Investment Fund Managers Directive regulations.

That is according to a pair of reports on the use of sanctions by national competent authorities (NCAs) published by the European Securities and Markets Authority (Esma), the EU securities markets regulator.

Ucits sanctions

Under the Ucits directive, nine NCAs in total imposed 38 penalties in 2022, with a combined financial value exceeding €97m, said the Esma , issued on Tuesday 18 July 2023.

One NCA (in France) alone accounted for over €95m of the imposed penalties.

Additionally, seven NCAs implemented 18 measures, while 16 NCAs did not issue any sanctions during the reference period.

Luxembourg authorities contributed to these figures by issuing two penalties totaling €167,668 against management companies.

From 2016 to 2022, Luxembourg authorities issued a total of 40 penalties under the Ucits directive, amounting to €1.44m. Notably, the total amount of penalties imposed in 2022 remained the highest since data collection began in 2016.

However, despite Luxembourg-domiciled Ucits accounting for 40% of EU total, the financial penalties issued by Luxembourg under the Ucits directive from 2016 to 2022 only accounted for 1% of the overall penalties imposed.

AIFMD sanctions

Regarding the AIFMD, 10 NCAs imposed 128 penalties in 2022, with three NCAs individually issuing 43, 46 and 18 penalties, data compiled by Esma .

The total value of the financial penalties reached over €2m, with a single NCA imposing (in France) €1,520,000.

Additionally, 10 NCAs implemented 146 measures, with four NCAs levying 38, 57, 19 and 16 measures, respectively.

Similar to Ucits, 16 NCAs did not impose any penalties during the reference period.

Luxembourg authorities contributed to these figures by issuing four penalties totaling €337,295 on AIFMs.

From 2013 to 2022, Luxembourg authorities issued a total of 21 penalties under the AIFMD, amounting to €1.01m.

Despite Luxembourg’s significant share of total net assets in the EU AIF industry, amounting to €950.7bn at the end of 2022 (15% of the total), the financial penalties issued by Luxembourg under the AIFMD from 2013 to 2022 only accounted for 1% of the overall penalties imposed.

In May, , director general of the Luxembourg Financial Sector Supervisory Commission (CSSF), said that there has been too much focus among financial players in the grand duchy on the recent rise in administrative penalties. Levying fines was “only a small part of our work, but it’s a part that gets lots of attention,” Marx an industry conference.

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