The use of technology to address regulatory challenges has been around for decades. Nevertheless, like FinTech, RegTech appears to be a new industry.
Regtech has become an important area of focus for Luxembourg’s financial centre.
Commercial, craft and industrial activities, as well as some liberal professions, are subject to a business permit (autorisation d'établissement or autorisation de commerce).
This permit is granted to businesses (the professional operating under his/her own name or the company) within a 3-month deadline, which may be extended by another month under some conditions, if:
- the person responsible for the operation or management of the business satisfies the required legal conditions of qualification and professional integrity for the activity concerned;
- and the business has a fixed physical establishment in Luxembourg (no so- called 'letterbox companies').
Costs : around EUR 2,000
Service providers such as investment funds are subject to many obligations, mainly concerning the filing with the CSSF of information required by law in a specific format and through specific channels. Fintechs is an essential partner for all these service providers.
27 Regtechs divided according to their own expertises in regulatory reporting, risk management, identify management and control and compliance.
Three Luxembourg Regtechs are recognized worldwide (November 2018) in the list of the 100 most innovative regtechs in the world according to the Regtech Analyst Institute:
- EMU (the "tripadvisor" of the investment fund industry)
- ALGOREG specializes in customer registration procedures for regulated financial institutions with a video-based solution
- Governance.com, specialized in the governance of investment funds