The financial sector in Luxembourg is regulated by the Commission de Surveillance du Secteur Financière (CSSF), which created the Professionals of the Financial Sector (PFS) designation to set guidelines for three categories of companies operating in the financial sector: investment firms, specialised companies, and external support companies. This latter ‘Support PFS’ (or PFS/S) status was introduced in 2003 to enable quality control of companies that provide outsourcing of operational services for the financial sector. By 2009 there were already 90 companies certified PFS/S in Luxembourg.
When CSSF announced plans to introduce new regulations on risk management for PFS/S companies, the CRP Henri Tudor project INNOFinance organised a survey of these companies to determine their ability to comply. What they found was that risk management activities were rarely being done, or were spread informally throughout the company. To address this situation, the project PROGRESS was created with the aim of developing tools and providing information to the PFS/S sector to allow them to improve their risk management and adapt to the new regulations.
PROGRESS began with a study aimed at identifying specific risks related to outsourcing in the financial sector. A tool to efficiently identify priority risk management activities will be developed and made available to PFS/S companies, together with a series of documents that will enable them to develop a basic risk management strategy. An awareness campaign and dedicated workshops will provide the opportunity for companies to become better informed, while training will be developed to promote risk management skills within the PFS/S sector.
PROGRESS will increase and improve risk management within PFS/S companies, helping them to better comply with CSSF regulations and improve their overall quality. An additional aim is to promote the innovative PFS designation outside of Luxembourg. The PROGRESS project will allow CRP Henri Tudor to increase its competences in risk management, benefitting related projects such as ISIS and the innovation programme INNOFINANCE.