Cross-border investment services are growing, and Luxembourg has a key role to play

Luxembourg remains a key cross-border hub

Luxembourg continues to stand out as one of the main home jurisdictions for firms providing investment services across the EU.

With 55 firms in scope, Luxembourg records the second-highest number of cross-border providers after Cyprus.

The figures underline the importance of Luxembourg’s financial ecosystem in supporting the development of a genuinely integrated European market for investment services.

They also demonstrate the ability of Luxembourg-based institutions to serve clients across Member States and contribute to broader EU objectives aimed at mobilising savings and facilitating investment throughout Europe.

Luxembourg also has a significant position as a host market, with the number of clients receiving cross-border investment services corresponding to approximately 11% of its population.

Cross-border activity at the heart of EU market integration

ESMA’s findings come at a time when strengthening the integration of European capital markets is a central policy objective under the Savings and Investments Union.

The substantial increase in cross-border activity shows that investors increasingly make use of services provided by institutions established in other Member States.

This development highlights the importance of effective supervisory convergence and fewer unnecessary barriers.

For a financial centre such as Luxembourg, preserving the ability to provide services efficiently across borders is particularly important.

Avoiding unnecessary national barriers, divergent requirements and duplicative supervisory expectations can help firms scale their services across the EU while maintaining a high and consistent level of investor protection.

Greater supervisory convergence and effective cooperation between home and host authorities can play an important role in achieving this objective.

A more harmonised approach can facilitate cross-border business while ensuring that investor protection standards are applied consistently throughout the Union.

Supporting a more integrated European investment market

The report also shows that cross-border retail investment services are increasingly concentrated among providers capable of operating at European scale.

Execution services represent approximately 87% of active clients, reflecting in particular the development of digital investment platforms and increasingly accessible investment solutions.

Against this background, ESMA’s continued monitoring of cross-border activities can contribute to identifying risks while supporting a supervisory framework that remains proportionate and conducive to further market integration.

For Luxembourg, the findings reaffirm both its strong position in the European cross-border financial services landscape and the importance of continuing efforts at EU level to remove remaining barriers to cross-border activity, strengthen supervisory convergence and ensure that the Single Market passport can operate effectively in practice.