“In an ever-changing legal and technological context, it is vital for companies to focus on core activities and prepare their business for the future,” explains Stéphane Césari, Audit Partner and PSF Leader at Deloitte Luxembourg. “Our research, which is the basis of the report, shows the changes and trends in the PSF sector. The report furthermore includes detailed information on the different types of PSF, and highlights the vitality of the sector as a whole.

A dynamic sector
Following steady growth of almost 95% between 2004 and 2011, the number of PSF entities has stabilised over the last years. The Grand Duchy had a total of 309 PSF entities on 31 December 2015 against 316 in late 2014.

As of 2015, the majority of the PSF entities (40%) were specialized PSF. Nevertheless, despite constant growth between 2007 and 2013 to the tune of 85%, the category of specialized PSF saw a decline of 3% in 2014. However, the figure rose again by 1% in 2015.

In 2015, investment firms represented 35% of the PSF sector. Initially in the majority, the financial crisis curbed their growth and following a downturn in 2012, the situation has since stabilised. Finally, the category of support PSF has grown exponentially since its origin (+42% since 2007).

This figure has however bottomed out since 2012 and as of 31 December 2015, the support PSF entities represented 25% of the PSF sector as a whole. The number of support PSF entities grew from 78 as of 31 December 2015 to 82 in August 2016.

Raphaël Charlier, Audit Partner at Deloitte Luxembourg, noted that: “Several factors are behind this booming PSF market. The key factors at play are cost-saving through the merging of resources, the development of the financial sector, the expansion of financial and non-financial services for which a PSF status is mandatory, the recognition of PSF as a quality stamp based on the fact that the sector is regulated by the CSSF, not forgetting the attractiveness of Luxembourg as a place to do business. Since 2007, more than half of the PSF entities founded in Luxembourg were of foreign origin and this figure is constantly evolving”.

The report is published in two volumes, and provides a comprehensive view of the PSF sector, setting out the existing PSF categories and describing their development. The first volume entitled Overview and outlook of a promising sector offers a comprehensive view of the PSF market and the different PSF licences. It is supplemented by interviews of key financial players and timely articles written by industry professionals. The second volume entitled At the heart of regulatory and tax environments was first drawn up in 2015 and reviewed in 2016. It aims to provide a better understanding of the regulatory context and the conditions to be fulfilled for obtaining a PSF status.

The white papers were officially presented to an audience of around 100 financial industry professionals at the PSF 2016 Panorama and Outlook conference, which took place on Tuesday 8 November 2016 at Mudam.

To read the entire white paper in English and French, please visit the Deloitte Luxembourg website: ...

https://www2.deloitte.com/lu/en/pages/psf/articles/psf-panorama-perspectives.html

https://www2.deloitte.com/lu/en/pages/psf/articles/psf-overview-outlook.htm