Private Banking Brochures: The Article 37-3(2) LFS Review Standard

Article 37-3(2) of the Luxembourg law of 5 April 1993 on the financial sector, as amended (the “LFS”), sets the review baseline. Client information must be fair, clear and not misleading. Marketing communications must be clearly identifiable. A private-banking brochure enters that perimeter when it is addressed to clients or potential clients by a credit institution. A credit institution is an institution receiving repayable funds from the public and granting credit for its own account, as defined in Article 1(12) of the LFS. The same applies when the brochure is issued by an investment firm, as defined in Article 1(9) of the LFS. An investment firm is not always limited to those activities. Article 1(9) of the LFS refers to the definition in Article 4(1)(1) of Directive 2014/65/EU (“MiFID II”). Under that definition, an investment firm is a legal person. Its regular occupation or business must consist of providing one or more investment services to third parties and/or performing one or more investment activities on a professional basis. In the context of private-banking brochures, several services are commonly relevant. These include investment advice. They also include portfolio management. Reception and transmission of orders may also be relevant. This service consists of receiving client orders and forwarding them to another entity for execution. Execution of orders on behalf of clients is another typical example.

MiFID II supplies the EU conduct-of-business framework. Luxembourg transposed MiFID II through the law of 30 May 2018 on markets in financial instruments.

Three controls for MiFID II brochure review

First, classify the brochure. Map its content against the service and instrument perimeter. Advice, portfolio management, order reception and transmission, execution, custody, funds, and structured products must be reviewed if they are discussed in communications addressed to clients or prospective clients.

Second, test every claim. Balance each benefit statement against relevant risks and costs. Environmental, social and governance (“ESG”) language, tax references, and cross-border contacts require separate verification. Where product governance applies, target-market documentation must align with the brochure and distribution plan.

Third, keep a record of the approval process. Document the reviewed version, approver, audience, channel, and date. Article 37-3(2) of the LFS applies before circulation. This means the rule applies prior to distributing the brochure and does not require a recurring submission deadline to the Commission de surveillance du secteur financier (“CSSF”).

The Retail Investment Strategy is a package of proposed European Union legislative reforms for retail investors. It reached political agreement on 18 December 2025. This marked an important step in the EU legislative process. The initiative is intended to strengthen investor protection. It also aims to improve the retail investment framework across Member States. However, a political agreement does not by itself create binding legal obligations. The package must still undergo formal adoption by the relevant EU institutions and be published in the Official Journal of the European Union before its provisions can take legal effect. Once the final legislative text is available, Luxembourg will need to assess and implement any required changes through its domestic legal and regulatory framework, including amendments to existing laws or supervisory practices where necessary. Until those steps are completed and any new requirements become applicable, firms should continue to rely on the current Luxembourg rules and monitor developments closely. Article 37-3(2) of the LFS remains the operative Luxembourg rule.

References:

• Article 37-3(2) of the Luxembourg law of 5 April 1993 on the financial sector, as amended (the LFS): https://www.cssf.lu/wp-content/uploads/L_050493_lfs.pdf

• Directive 2014/65/EU of 15 May 2014 on markets in financial instruments (MiFID II): https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=celex%3A32014L0065

• Luxembourg law of 30 May 2018 on markets in financial instruments: https://legilux.public.lu/eli/etat/leg/loi/2018/05/30/a446/jo

• Commission de surveillance du secteur financier – ESMA Common Supervisory Action on MiFID II marketing communications, June 2024: https://www.cssf.lu/en/2024/06/final-report-esma-common-supervisory-action-on-the-application-of-mifid-ii-disclosure-rules-with-regard-to-marketing-communications-and-advertisements-of-financial-products/

• Council of the European Union – Retail Investment Strategy, political agreement, 18 December 2025: https://www.consilium.europa.eu/en/press/press-releases/2025/12/18/retail-investment-strategy-council-and-parliament-agree-on-package-to-empower-consumers-while-boosting-markets/

• European Parliament Legislative Train – Retail Investment Strategy: https://www.europarl.europa.eu/legislative-train/theme-an-economy-that-works-for-people/file-retail-investment-strategy

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