Legal requirements and authorisation procedure for mortgage credit intermediaries

The legal requirements that must be met and the procedure that must be followed in order to obtain an authorisation as mortgage credit intermediary are laid down in Articles L. 226-23 to L.226-31 of the Law of 23 December 2016 transposing Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014 on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010 and amending the Consumer Code (“Law of 23 December 2016”).

An authorisation as mortgage credit intermediary may, in general, be granted to natural or legal persons in the form of a public entity or a commercial company.

An applicant which is a legal person must prove that its central administration and its registered office is located in Luxembourg. An applicant who is a natural person must prove that s/he effectively conducts business in Luxembourg and that his/her central administration is in Luxembourg.

In order to be authorised, a natural person established as a mortgage credit intermediary, and where the mortgage credit intermediary is established as a legal person, the members of the board of directors or natural persons performing equivalent tasks within a mortgage credit intermediary which is a legal person but does not have a board of directors must produce evidence of professional standing and possess the appropriate level of knowledge and competence in relation to mortgage credit agreements as referred to in Article L. 226-38 of the Law of 23 December 2016.

Professional standing is assessed on the basis of the extracts of the criminal record and of any other evidence showing that the persons concerned are of good repute and offer every guarantee of irreproachable conduct, as referred to in Article L. 226-25(1) of the Law of 23 December 2016.

Where a mortgage credit intermediary which is a natural person managed by a single person, the authorisation is subject to the production of evidence by the applicant to the CSSF that it has taken alternative arrangements to ensure a sound and prudent management.

Where authorisation is granted to a mortgage credit intermediary established as a legal person, the persons referred to above shall be at least two in number (cf. Article L. 226-25(4) of the Law of 23 December 2016).

Authorisation is conditional on the mortgage credit intermediary holding professional indemnity insurance covering the territories in which it offers services, or some other comparable guarantee against liability arising from professional negligence. For a tied mortgage credit intermediary, the insurance or comparable guarantee can be provided by the creditor for which the tied mortgage credit intermediary is empowered to act.

The authorisation as a mortgage credit intermediary is granted by the CSSF following the submission of a written application. The CSSF verifies whether the conditions laid down in the Law of 23 December 2016 are fulfilled.

The authorisation is granted for an unlimited period of time provided the mortgage credit intermediary complies at all times with the applicable legal requirements. Upon receipt of the authorisation, the mortgage credit intermediary may immediately start to carry on business.

Before transmitting the application to the CSSF, the applicant may contact the CSSF to request information on the qualification of an activity, on the need for an authorisation, on the status requested, on the application documentation for the authorisation file or any other important question relating to the applicant’s project. The applicant may also request a meeting to present the project and to discuss certain aspects of it.

The applicant must submit a complete and detailed file to the CSSF by using the form for the authorisation of mortgage credit intermediaries available below.

The complete application file shall be submitted to the CSSF in paper form and shall, in addition, be transmitted in electronic form to: specialisedpfs_license@cssf.lu.

Upon receipt of the file by the CSSF, the applicant will receive an acknowledgement of receipt which indicates the department in charge of the examination of the file as well as the name of the contact person at the CSSF. The CSSF will examine the file and may raise comments or request additional information.

The decision of the CSSF on the application for authorisation will be notified to the applicant within six months following receipt of the application file or, should the file be incomplete, within six months following receipt of the missing information. All decisions on an application for authorisation shall state the reasons in fact and in law.

A decision will be taken within 12 months, at the latest, of the receipt of the application for authorisation. If no decision is notified within 12 months, it means that the authorisation has been refused.

The decision of the CSSF may be referred to the Tribunal administratif (Administrative Tribunal) which deals with the substance of the case. The case shall be filed within one month, or else shall be time-barred.