TITLE: Luxembourg's Financial Authority Issues Requirements for Special Auditors of Covered Bond Issuers
BODY:
On February 18, 2026, the Commission de Surveillance du Secteur Financier (CSSF) published Circular 26/907, establishing requirements applicable to special approved auditors (REAS) overseeing covered bond emissions by credit institutions in Luxembourg.
The circular clarifies obligations for credit institutions issuing covered bonds under the modified Law of December 8, 2021, which transposes Directive (EU) 2019/2162 on covered bonds and implements Regulation (EU) 2019/2160 amending Regulation (EU) 575/2013. The REAS must be an approved auditor or approved audit firm complying with the Law of July 23, 2016 on the audit profession and possess necessary competencies to perform oversight functions. Credit institutions must designate and obtain CSSF approval for the REAS, with the requirement that the same auditor cannot simultaneously serve as both REAS and statutory auditor.
Pre-issuance, the REAS must issue a certificate confirming legally required coverage exists and is registered in the covered bond register. This comprises a limited assurance report per emission programme (within 15 days of first tranche issuance) and agreed-upon procedures reports per tranche, both submitted to the CSSF before emission. Annually post-issuance, the REAS must provide reasonable assurance that the credit institution complies with all legal and regulatory requirements concerning covered asset constitution, registration, prescribed amounts, and continued existence. The annual report must be submitted to the CSSF within six months of the financial year-end and include the latest quarterly statement (Q4).
The circular applies to covered bonds issued after July 7, 2022, and entered into force upon publication.