Provisional conclusions of the CSSF’s survey on late trading and market timing

Within the framework of the international endeavours to prohibit late trading and market timing, the CSSF sent a circular letter to 407 service providers in November 2003, inviting them to answer a set of questions.

The responses the CSSF collected show that the vast majority of the entities surveyed co-operated with the CSSF by providing extensive information. Even if the CSSF has not finalised its survey to date, it can already state that considering the responses received the situation is overall under control, even though supplementary information will be required in certain isolated cases. Moreover, it is not ruled out that the CSSF will carry out on-site inspections at certain entities’ premises to verify the information provided.

The CSSF is satisfied to note that the entities surveyed have taken or are taking the necessary additional measures of protection.

After the professionals of the financial sector have been consulted, the CSSF has decided to publish a circular intended to provide the latter with appropriate guidelines. This circular will notably serve as a reference for their future decisions and choices. The CSSF will take into account the specificities of the Luxembourg investment fund industry. Indeed, many Luxembourg funds are invested as well as distributed across all the time zones and marketed through intermediaries subject to a foreign supervisory authority.

As a conclusion, the CSSF stresses that the protection and fair treatment of the investors has always been its absolute priority. This will therefore be the leitmotiv of the future circular, whose purpose will be to avoid that investors are financially harmed when the above-mentioned improper practices are used.