Since its implementation, CSSF Circular 18/698 has become a key reference in the governance of asset management companies in the Grand Duchy of Luxembourg.
Yet in 2025, certain recurring issues still persist. As a consulting firm working closely with clients in the field, Osmia Consulting regularly identifies the same gaps, many of which could often be avoided.
- 1. Confusion between control functions
The roles of MLRO, RR, and RC are sometimes misunderstood or improperly assigned. One person may hold several functions, but this requires rigorous formalization of responsibilities, sufficient availability, and the appropriate level of competence. Too many structures still overlook the incompatibility thresholds set out by the regulations. - 2. Insufficient governance documentation
Policies exist, but their updates are neglected. Even more concerning, some are not fully approved by the Board of Directors or do not accurately reflect the company’s actual activities. The CSSF now sanctions these shortcomings, even in the absence of bad faith, in line with its governance expectations. - 3. Insufficient oversight of delegates
The oversight of delegated functions, particularly in portfolio management or distribution, is often reduced to a mere administrative formality. However, delegation never removes legal and regulatory responsibility. The absence of formal reporting or clearly defined KPIs is a major risk indicator and should be addressed accordingly. - 4. Overly generic compliance reviews
An annual review based on a generic template does not meet the requirements of a truly risk-based approach. The CSSF expects a targeted analysis, proportionate to the company’s actual activities and incorporating its inherent risks. - 5. Failure to trigger an external review in a timely manner
The use of an external review of the control framework is not always treated with the seriousness it requires, even when circumstances clearly call for it. Yet this exercise is an essential lever for strengthening the credibility and robustness of the organization.
How can Osmia Consulting help you?
With extensive experience in the Luxembourg regulatory landscape, Osmia Consulting gives you access to a diverse pool of professionals who can act as RC, independent director, or consultant to your company, ensuring expert and efficient management of your compliance obligations.
Turn compliance into a driver of professionalization rather than a purely defensive exercise.
Osmia Consulting supports its clients in this approach, with a strong focus on proportionality, traceability, and efficiency.