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COVID-19: introduction of practical regulation and considerations in Luxembourg

2 April 2020

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In the wave of the COVID-19 situation, many regulators and national authorities have established new regulations and measures to maintain the stability of their financial industry and ensure companies business continuity. Amongst these practical considerations, Luxembourg regulators and authorities have introduced a new regulation to facilitate the holding of virtual board and shareholder meetings. This reaffirms the importance of providing regulatory reporting in a timely manner, extending the filing of annual financial statements and insisting on the importance for supervised entities to provide virtual or remote access to their employees.

Facilitating virtual board and shareholders meetings

On 20 March 2020, a Grand Ducal regulation came into force offering several measures to facilitate the holding of board and shareholder meetings. This new regulation implies that Luxembourg based companies may organise shareholders meetings without a physical meeting.

Shareholders meetings

The new regulation states that, notwithstanding any contrary requirements in the articles, that general meetings of shareholder may be held without a physical meeting with shareholders voting remotely (in written or electronically), through a proxy-holder designated by the company or by videoconference (or similar means of communication allowing shareholders identification).

Board meetings

Similarly, board meetings may also be held, notwithstanding any contrary requirements in the articles, without a physical meeting, through circular written resolutions or videoconference (or similar means of communication allowing the identification of the board members). Board members participating by such means are deemed present for the purpose of quorum and majority.

In case convening notices have already been received by the participants, companies who wish to proceed as above are required to publish their decision and, inform their shareholders no later than three business days before the meeting.

CSSF prompts supervised entities to perform on-time regulatory reporting

In the context of COVID-19, Luxembourg regulator Commission de Surveillance du Secteur Financier (CSSF), insists on the importance of ‘reliable supervisory information’ and requests supervised entities to perform their regulatory reporting on time and to proactively contact the CSSF ahead of reporting deadline in case of complications. During the COVID-19 period, the CSSF doesn’t apply a strict enforcement policy with regards to reporting if delays are duly justified and ensures close coordination with national authorities, the European supervisory authorities and the European Central Bank.

Extension to file annual financial accounts

The Luxembourg Business Register (LBR) announced on 18 March 2020 that the period for filling 2019 annual accounts is extended by four months. Shareholders have until 30 June 2020 to approve annual accounts.

CSSF urges supervised entities to foster remote and virtual work access

On 22 March 2020, the Luxembourg regulator announced that only vital functions – essential to maintain the critical mission of the supervised entities and which can’t be performed remotely –should staff need to work at usual workplace or backup site. Supervised entities are required to provide virtual desktop or remote access solutions for employees who aren’t equipped with laptops and mobile devices.