Depending on the financial institutions' activity and the risks they are likely to face, the intensity of the rules applicable to them will vary.

Broadly, however, the following conditions will need to be satisfied:

• Shareholder structure – The applicant must be capable of being effectively supervised. The regulator will also consider the transparency of the firm's structure, that is, whether there are any impediments to the supervision of the applicant, including the group structure and any relevant laws restricting access to information.
• Contemplated activities – The authorization requested by the entity seeking authorization must correspond to the contemplated activities, and the entity must actually carry out the activities covered by the license. The activities must also include the required anti-money laundering and "know your customer" (KYC) procedures. The application for authorization shall not be examined in terms of the economic needs of the Luxembourg market.
• Central administration – The registered office and the central administrations must be located in Luxembourg. This emphasizes the need for firms to have a substantive presence in Luxembourg that is accessible to the regulator and enables the regulator to supervise the firm.
• Appropriate infrastructure and resources – Applicants must satisfy the regulator that they have adequate resources to carry out the relevant regulated activities, including qualified management of the firm in a healthy and prudent manner. Resources include financial resources as well as human resources (including the composition and qualification of the board of directors and key functions holder’s suitability) and infrastructure comprising the appropriate accounting and IT system.
• External auditing – The annual accounts must be audited by an external auditor who must be an established Luxembourg réviseur d’entreprise agréé (approved statutory auditor) and have adequate professional experience.