Regulatory Alerts2025-12-09
Added · Updated
CSSF Circular 25/899: Application of EBA Guidelines on ADC Exposures to Residential Property under Article 126a of Regulation (EU) 575/2013
The CSSF integrates the EBA Guidelines on Acquisition, Development, and Construction (ADC) exposures to residential property into its administrative practice and regulatory approach for Less Significant Institutions and CRR investment firms incorporated under Luxembourg law. The guidelines specify credit risk-mitigating conditions allowing institutions to assign a 100% risk weight instead of 150% to ADC exposures, including thresholds for substantial cash deposits (10% of sale price for pre-sales, 300% of monthly rent for pre-leases), obligor-contributed equity (minimum 25%, or 20% for social housing), and a significant portion of total contracts (50%). This circular applies with immediate effect.
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