Holger von Keutz , Partner and Securitisation Leader, PwC Luxembourg,  Markus Zenz , Partner, Pwc Luxembourg and  Andrei Radu , Senior Manager, PwC Luxembourg. Credit: PwC Luxembourg

Holger von Keutz , Partner and Securitisation Leader, PwC Luxembourg,  Markus Zenz , Partner, Pwc Luxembourg and  Andrei Radu , Senior Manager, PwC Luxembourg. Credit: PwC Luxembourg

Over the past two decades, Luxembourg's securitisation market has undergone a remarkable evolution starting with the enactment of the Securitisation Law on 22 March 2004. Initially aimed at enhancing Luxembourg's position as a financial hub, the Securitisation Law introduced a mechanism for international financial transactions by pooling assets and issuing securities.

Despite challenges such as the 2008 financial crisis and subsequent regulatory reforms, Luxembourg's securitisation market exhibited resilience and adaptability. It navigated through crises, demonstrated robustness during downturns and experienced growth periods driven by innovative solutions and regulatory alignment.

By 2018, Luxembourg emerged as a leader in hosting European securitisation vehicles, showcasing its ability to provide a conducive environment for such transactions.

In 2022, Luxembourg embraced regulatory modernisation, culminating with the amended Securitisation Law. The modernised law provided increased flexibility and legal certainty, supporting the market's continued growth trajectory.

Looking ahead, the securitisation market in Luxembourg faces both regulatory and operational challenges. Tax initiatives like ATAD and evolving regulatory landscapes require ongoing adaptation and compliance efforts. Operational hurdles, such as those related to opening bank accounts, necessitate efficient solutions to streamline processes and ensure smooth transactions.

Evolution of Luxembourg’s securitisation market PwC Luxembourg

Evolution of Luxembourg’s securitisation market PwC Luxembourg

However, amidst these challenges, opportunities arise, particularly in green financing and blockchain technology. Luxembourg is well-positioned to capitalise on the growing demand for sustainable investment options, leveraging its expertise in financial services and commitment to innovation. Additionally, embracing cryptocurrencies and blockchain technology presents avenues for enhancing efficiency and creating novel financial products within the securitisation market.

With a commitment to innovation and a supportive legislative environment, Luxembourg's securitisation market is set for continued growth and resilience. By navigating through regulatory complexities and embracing emerging trends, Luxembourg can further solidify its position as a leading player in the global securitisation, supporting the goals of the European Capital Markets Union.

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