Regulated Professionals of the Financial Sector (PFSs)
In Luxembourg’s highly interconnected financial ecosystem, Regulated Professionals of the Financial Sector (PFS) serve as trusted partners to banks, investment firms, and financial institutions. Operating largely behind the scenes, they provide the technical, operational, and compliance infrastructure that enables institutions to grow, adapt, and stay efficient in a fast-evolving regulatory environment.
Rather than competing with banks, PFS entities complement the core banking ecosystem. They deliver specialised services that streamline operations, enhance regulatory compliance, and facilitate innovation—allowing financial institutions to focus on their core business while ensuring full control and oversight.
Core Categories of Regulated PFSs
Regulated PFS are non-bank financial professionals licensed and supervised by the CSSF (Commission de Surveillance du Secteur Financier). They are governed by the Law of 5 April 1993 on the Financial Sector, and while they do not take deposits or issue loans, they are authorised to perform a wide range of financial activities.
Client Communication Agents (CCAs)
- Provide secure infrastructure for digital interaction between banks and clients.
- Develop and operate online portals, mobile apps, and white-label digital platforms.
- Operate under strict CSSF approval.
Administrative Agents of the Financial Sector
- Manage back-office processes such as accounting, document management, and transaction processing.
- Support banks with regulatory documentation, compliance tracking, and order execution.
Professional Custodians of Financial Instruments or Funds
- Offer safekeeping services for securities and funds.
- Act as intermediaries in fund servicing and settlement processes.
IT Systems Operators of the Financial Sector
- Deliver IT infrastructure, cloud hosting, and cybersecurity solutions.
- Must comply with CSSF outsourcing and resilience requirements.
Domiciliation Agents
- Provide corporate administration services for holding companies and SPVs.
- Facilitate Luxembourg’s strengths in structured finance and cross-border lending.
Primary and Secondary Financial Sector Professionals
- Include payment service providers, brokerage agents, and investment advisers.
- May operate under MiFID II, PSD2, or in a B2B capacity alongside regulated banks.
Trusted Partners to the Banking Sector
Banks in Luxembourg rely on PFS entities to handle critical outsourced functions, particularly in areas that are:
- Non-core but heavily regulated, such as IT hosting or archiving.
- Resource-intensive, including KYC checks, transaction monitoring, or client onboarding.
- Regulatory-sensitive, requiring transparent oversight, auditability, and shared liability.
This delegation model is strictly governed by CSSF regulations, including formal contracts, compliance reviews, and full accountability on both sides.
Enabling Scale, Agility, and Compliance
Regulated PFS allow financial institutions to:
- Scale operations without growing internal headcount.
- Accelerate time-to-market for new products and digital services.
- Maintain high regulatory standards through audited, specialised partners.
- Access expert solutions for risk management, IT security, and legal structuring.
As Luxembourg’s financial centre evolves, PFS providers are becoming strategic enablers—ensuring the entire ecosystem remains resilient, competitive, and innovation-ready.
