China and Australia offer financial services in Luxembourg

China and Australia join Canada, Switzerland, the United States, Japan, Hong Kong, Singapore and the United Kingdom as “third countries” or “territories treated as equivalent to Member States of the European Union” for the purposes of investment services or investment activities. Luxembourg, according to the CSSF, the Luxembourg Financial Supervisory Authority.

The move is positive, said Attilio Veneziano, founder of regulatory consultancy Veneziano & Partners. “Chinese and Australian companies can now offer services to clients based in Luxembourg,” he told Delano. However, he cautioned that these services are limited to Luxembourg and will not extend to the rest of Europe. “This is not a passport to Europe,” he insisted.

According to Luxembourg for Finance, since 1979, seven Chinese banks have established their European headquarters in Luxembourg. Bank of China, Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, China Merchants Bank, Bank of Communications and China Everbright. We can add Banque Internationale à Luxembourg and Hauck & Aufhäuser, both owned by Chinese shareholders.

These Chinese banks serve both China-based clients who want to invest in Europe and European clients who need financing for their business in China.
Luxembourg for Finance website
. “In addition to corporate banking, the banks have expanded their operations into capital markets and asset and wealth management in Europe, thus acting as a bridge between Europe and China,” one reads on the site.

At the same time, National Bank of Australia has debt securities admitted to trading on the Luxembourg Stock Exchange and subject to supervision by the CSSF.

In 2020, Luxembourg was one of the first countries to offer equality, the UK’s third country after Brexit. This enables UK companies with clients in Luxembourg to continue to provide services despite Brexit restrictions.

The United Kingdom applies a similar regime, but on an exemption basis. “The UK automatically provides the equivalent of investment services and activities to third countries without the need to apply,” said Attilio Veneziano. “England has always shown this openness.”

South Korea, this
Increasing access to private equity and private debt investment opportunities in Europe through Luxembourg-designed investment structures
, Not in the CSSF list. “It is not clear whether the CSSF intends to continue expanding the list of third countries,” commented Attilio Veneziano.

This article was written
Delano
Translated and edited for Paperjam.