On 15 June 2021, the Commission de Surveillance du Secteur Financier (CSSF) published an updated version of its Q&A on the statuses of PFS-Part II with respect to the granting of loans to the public.
- The status of professional performing lending operations which consists of granting loans, for their own account, to the public, is governed by Article 28-4 of the law of 5 April 1993 on the financial sector, as amended (LFS) and requires a CSSF’s authorization. However, the LFS does not provide a definition of the term “public.”
- In its update, the CSSF clarifies that a lending activity is not directed towards the public and does not fall within the scope of Article 28-4 of the LFS where the nominal value of the loan amounts to EUR 3 million at least (or the equivalent amount in another currency) and the loans are granted exclusively to professionals as defined in Article L. 010-1.2 of the Consumer Code.
- It must be noted that a CSSF’s authorization is also not required where loans are granted to a limited circle of persons who have been determined previously. The same applies where loans are granted through a Luxembourg special purpose vehicle (SPV) and granted to a limited circle of persons who have been determined previously by the entity that holds 100% of the SPV or controls it.
- In all other cases, the CSSF indicates that they will carry out an assessment on a case-by-case basis.
This clarification is welcome by the credit fund sponsor community when they use Luxembourg SPVs for their lending activity.