Reform of Article 41 of the Law on the Financial Sector: Professional secrecy and outsourcing arrangements

ABBL Published 09.02.2018

On 6 February 2018, the Chamber of Deputies voted the law amending, among others, Article 41 of the Law of 5 April 1993 on the financial sector, dealing with professional secrecy obligations. The objective of the amendments of the Law is mainly to facilitate outsourcing arrangements.

Article 41 will offer the possibility to outsource to another Luxembourg professional that is subject to the supervision of the CSSF or ECB, but also of the CAA. It provides for an extension of the scope of the exceptions to the banking secrecy by allowing access to confidential data to any professional of the financial sector or insurance professional established in Luxembourg, provided that the latter are under the supervision of the CSSF, the ECB or the CAA and acting as service provider under an outsourcing arrangement.

Moreover, Article 41 now provides for an explicit exception to the professional secrecy obligations for all intragroup and extra-group outsourcing arrangements, provided that:

  • the credit institution complies with specific organisational requirements,
  • the service provider, having access to confidential information, is subject to a professional secrecy obligation or be bound by a confidentiality agreement,
  • the client has accepted in accordance with the law or with the conditions agreed between the parties, the outsourcing of services, the type of information to be transmitted in the framework of the outsourcing and the country of establishment of the service provider.

The new flexibility offered is without prejudice to the conditions stemming from the regime applicable under the law of 2 August 2002 on the protection of personal data. This means that in any case the client shall be informed of outsourcing arrangements.

By Catherine Bourin, Member of the ABBL Management Board 

 

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