A key aspect of the reform is the strengthening of governance practices. Measures include stricter conflict-of-interest management, such as restrictions on post-tenure employment for directors, and limits on the duration of mandates,14 years for CSSF directors and 15 years for CAA directors. These steps are designed to ensure greater transparency and accountability.

The leadership structures of both institutions are also being expanded. The CSSF will see an increase in its director count from four to six, alongside the general director, to address emerging challenges in the financial sector, such as crypto-assets and electronic payments. Similarly, the CAA will now have between two and four directors, in addition to its general director, to strengthen its operational capacity.

Another significant change involves the handling of financial sanctions. Under the new framework, funds collected from sanctions imposed by the CSSF will be redirected to the state treasury, ensuring a clear separation between regulatory activities and financial penalties.

The reforms also emphasise the importance of financial education. A legislative proposal seeks to formalise the CSSF’s role in promoting financial literacy, with efforts underway to integrate this mission into the broader legal framework. Lawmakers are pushing for swift implementation to benefit the public.

Lastly, discussions are ongoing regarding the role of the European Securities and Markets Authority (ESMA) in financial supervision. While some EU member states advocate for a stronger ESMA role, Luxembourg supports maintaining financial oversight at the national level through authorities like the CSSF.

For more information the news release can be found here