Download Luxembourg for Finance

With the kind support of
H.E. PIERRE GRAMEGNA
Minister of Finance, Grand Duchy of Luxembourg
FRANCIS ALLEN
ADM Financial Services Policy Division, Ontario Ministry of Finance
WHY LUXEMBOURG ?
LUXEMBOURG, A LEADING INTERNATIONAL FINANCIAL CENTRE
NICOLAS MACKEL
CEO, Luxembourg For Finance
At a glance
• Official designation :
The Grand Duchy of Luxembourg
• Government :
Constitutional Monarchy
• Capital : Luxembourg
• Currency : Euro
• Neighbouring countries :
Belgium, Germany and France
• Total population :
549 000 inhabitants, 45,3 % of the total population are
foreigners, 170 nationalities
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Welcome to Luxembourg
• Strategic location in the heart of Europe
• Highly skilled, multicultural and multilingual
workforce
• Safest capital in Europe (Mercer 2012)
• High quality of life attracting professionals from
around the world
• Home to European institutions
The stable, efficient and business oriented government is the key to
Luxembourg’s success.
Wang Hongzhang, Chairman of China Construction Bank
Leading financial centre of the
Eurozone (GFCI ranking: #17)
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The European Single Market
Free movement for 500 million customers in the EU of:
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Countries resized by cross-border financial
transactions
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Strengths of the financial centre
Diversified
International
Innovative
Stable
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Diversified
Main and other activities
Capital market
operations
No 1 bond listing centre
in Europe
Premier Wealth
Management
Centre in the
Eurozone – over
EUR 300bn AuM
Corporate banking
centre
Availability of
covered bonds
Premier centre
for cross-border
distribution of
insurance
products
2nd largest fund
centre in the world –
over EUR 3 trillion
AuM
1st in cross-border
fund distribution
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Diversified
Financial centre ecosystem
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International
Cross-border scope
• 143 banks from 27 countries, 2 from Canada
• Luxembourg investment funds distributed
in around 70 countries
• Internationally recognised standards
• Unique expertise in
cross-border business
“Luxembourg’s
financial centre
is robust,
efficient and
well supervised.”
International
Monetary Fund
Sources: CSSF, Alfi
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International
Renminbi business
• Largest RMB centre in the Eurozone:
 RMB loans & deposits
 RMB investment funds
 Dim Sum bonds
 Clearing & settlement
 European HQs of BoC, ICBC, CCB, BoCOM, ABC, CMB
• Impressive track record in RMB internationalisation
• Important driver of RMB product development
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International
The Luxembourg Stock Exchange
3,000+ issuers
70 Sovereigns
12 Supranationals
40,000+ listings
66% Bonds
16% Funds
16% Warrants
2% Shares/GDRs
•
Expert & worldwide leader in the listing of international securities
100+ countries
•
Gateway to access international investors
•
First European exchange to list a
•
Eurobond in 1963, a GDR in 1990, a Sukuk in 2002 and a Dim Sum bond in 2011
USA, Europe, China,
Brazil, Japan, India, …
54 currencies
CAD, USD, EUR, GBP,
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Innovative
Competitive track-record
Islamic
Finance
Largest domicile in the
non-Muslim world
2002: 1st listing of a
Sukuk on LuxSE
2014:1st Euro
denominated Sovereign
Sukuk (AAA rating)
Luxembourg
School of
Finance
Highest education
and research in
finance
FinTech
Preferred hub for ecommerce and
e-payment companies
Fund
labelling
LuxFLAG: recognised
label for microfinance and
environment funds
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Stable
Economy & politics
Strong macro-economic fundamentals:
•Consistently above EU average growth rate
•Low public debt: 23.6 % of GDP (< 60%)
•Low government deficit: 0.6 % of GDP (< 3 %)
Diversified economy:
•Steel industry, car components, logistics, digital economy, satellites, media, audiovisual production,
research & innovation
Political stability:
•Since the end of WW2: 8 Prime Ministers and 8 Ministers of Finance
High solvency ratios
•Average 17% ratio over recent years
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Conclusion
Finance is our trade
What can we do for you?
For more information: www.luxembourgforfinance.com
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THE LUXEMBOURG FINANCIAL CENTRE
YOUR GATEWAY TO EUROPE AND BEYOND
YVES MAAS
Chairman of the Luxembourg Bankers’ Association (ABBL)
Key Facts & Figures – Banking Employment
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Key Facts & Figures - Banks
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Key Facts & Figures – Private banking
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Why do banks come to Luxembourg?
1. Cross-border and international
•
A one-stop shop
•
Centre of competence
•
Wealth Analysis and Planning
•
First Private Banking centre in Eurozone
•
Strong regulatory framework (KYC, AML, Investor Protection,…)
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Why do banks come to Luxembourg?
2. Innovative and efficient pioneer
•
1st country to offer EU passport for investments funds
•
Luxembourg Stock Exchange recognised as the bond listing place of choice in
Europe
•
Family Office industry regulated (Multi Family Offices since December 2012)
•
Among the 1st countries to implement the Alternative Investment Fund Managers
Directive (AIFMD)
•
Luxembourg is open to virtual currencies
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Why do banks come to Luxembourg?
3. Service Offering and Toolbox
•Private Banking: customised solutions for sophisticated investors (HNWI & UHNWI)
•Custody & Asset management services
 Luxembourg has a full fledged market infrastructure for the investment fund industry
including: distributors, management companies, fund administrators, custodians, regulated
financial industry providers…
•Syndicated loans
 Luxembourg has established itself as the global hub for large syndicated and bilateral
loans in the Eurozone
 Financing of all types of project is offered, including fiduciary operations and bonds.
•Treasury Services: access to European Central Bank System
•Post-trading infrastructure
 4 Central Securities Depositories (including Clearstream) and direct access to the ECB’s
Target 2 Securities infrastructure
 Luxembourg has a hub for collateral management
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Luxembourg private banking service offer
A one-stop shop
Basic
banking
services
Art &
finance
Family
office
Investment advice /
Asset management
Wealth structuring
Real estate
Philanthropy
Succession
planning &
Company
transfer
Loans
Bancassurance
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The trend towards transparency
Automatic exchange of information as the new global standard
Fatca
European
Savings
Directive
EU
Adminis
trative
coopera
tion
OECD
AEOI as
global
standard
Common
reporting
standard
Various EU and global
AEOI initiatives
Coordination of EU &
OECD approaches
Global tax
transparency
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Luxembourg the EU Gateway for Canadian Banks
Ideal hub and gateway for
investing in and via Europe
Safe place for investors
International financial
centre specialized in
cross-border activities
EU market=500M consumers
Growing number of
multinationals with EU HQs in
Luxembourg
Multicultural and multilingual
services
Stock Exchange
specialized in
international bond listings
Centre of excellence for
cross-border private
banking
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LUXEMBOURG SOLUTIONS FOR CANADIAN
ASSET MANAGERS AND INVESTORS
Pierre Oberlé
Senior Business Development Manager
Our Panelists
•Pierre Oberlé, Senior Business Development Manager, Association of the
Luxembourg Fund Industry (ALFI)
•Bob Calmes, Arendt&Medernach, NY
•Frank Lippa, CFO, COO RBC Global Asset Management
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The Luxembourg fund industry
… at a glance
•3 893 investment funds (as of February 2015)
•13 902 portfolios (as of February 2015)
•EUR 3 403.866 billion in assets under management (as of February 2015)
=> EUR 35 billion of which originated from Canadian initiators
•43% of total new money in European funds in 2014 (EUR 249 billion); EUR 81.4
billion of net sales so far in 2015
•Number 1 fund centre in Europe, 2 in the world
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The Luxembourg fund industry
... its economic impact
•
14,000 jobs
•
8% of the GDP
•
10% of tax revenues
Priority for the new Luxembourg Government to sustain the long-term development
of the financial centre in general, and to strengthen the competitiveness of the
investment fund centre in particular.
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Luxembourg funds: the vehicle of choice for
cross-border distribution
Luxembourg: The gateway to all of the European Union
•
Setting up and authorisation of the fund in Luxembourg
•
Autorisation for sale in the 27 other EU Member States
•
Access to close to 500 million citizens
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Luxembourg funds: the vehicle of choice for
cross-border distribution
Luxembourg: The gateway to the European Union… and beyond
Sweden, 67%
Poland, 94%
Germany, 61%
France, 63%
South Korea, 96%
Japan, 59%
Switzerland, 67%
Bahrain, 75%
Peru, 46%
Taiwan, 76%
Hong Kong, 71%
Singapore, 69%
Chile, 66%
Sources: Global Fund Distribution analysis - December 31, 2013.
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Luxembourg funds: the vehicle of choice for
cross-border distribution
Principal markets for distribution of Luxembourg investment funds
(in terms of the number of registrations)
5 000
Europe
4 500
Asia Pacific
4 000
Americas
3 500
3 000
2 500
2 000
1 500
1 000
500
Liechtenstein
Hong Kong
Greece
Chile
Portugal
Ireland
Denmark
Singapore
Norway
Belgium
Finland
Sweden
Italy
Spain
Netherlands
United Kingdom
France
Austria
Switzerland
Germany
0
DE CH AT FR UK NL ES IT SE FI BE NO SG DK IE PT CL GR HK LI
Sources: Global Fund Distribution analysis Poster 2015
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A solution driven fund centre
Key considerations when defining the solution
Investor level considerations
Fund + Manager level considerations
Investment level considerations
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A solution driven fund centre
Key objectives of most solutions
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A solution driven fund centre
Comprehensive toolboxes allowing innovative and tailor made solutions
•
Regulatory toolbox
o UCITS
o AIFs
o unregulated vehicles
•
Vehicle toolbox
o SICAV
o SICAF
o FCP
o LLP
o Soparfi
•
Distribution toolbox
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Luxembourg: a fully fledged market infrastructure
Financial
Sectors Prof.
(PSF)
313
Stock
exchange
6 613 share
classes
listed
Distributors
1. Private Banks
2. Life Insurance
3. Platforms
3 893 funds
EUR 3 403.9
billion in AUM
14 000 jobs
69
Custodians
386 Management
Companies
(including 3rd
party ManCo)
160 Fund
Administrators
Auditors/
lawyers
Regulator
CSSF
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The reality check
•Leading asset management company in Canada
•Search for global fund platform – choices of jurisdiction (Luxembourg/Ireland)
•Objective to grow the business and export local success to global markets
•RBC Funds (Lux) formed in 2009 (UCITS/SICAV structure)
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The reality check
•
Incremental approach knowing that growing organically would be slower
•
Luxembourg had the infrastructure and support system to be successful
•
Access to various resources such as:
o management companies
o transfer agent & custodian support from RBC I&TS
o fund associations such as ALFI
o law/audit firms
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The reality check
•
Competition and building distribution networks - challenging
•
UCITS passport system for cross-border country registration
•
Develop distribution/country registration strategy
•
Understand what investment capabilities can be exported globally
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The reality check
•
Need to be patient and take a long-term view
•
RBC Funds (Lux) currently has 13 sub-funds
•
RBC Funds (Lux) AUM approx. USD$400 million
•
Learning curve and lots of work
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With the kind support of