The Newsletter | DECEMBER 2012

Dossier ICT

NoT a cLoud oN ThE horIzoN

GETTING To ThE NExT LEvEL

ThE buSINESS vaLuE oF FuN

Offshore RenminbiThE GLobaL chaLLENGE

T2SPLaY Your cardS rIGhT

CFAExcELLENcE IN buSINESS aNd EThIcaL STaNdardS Go haNd IN haNd

Edward SteichenWE ShaLL bE oNE PErSoN

oFFShoRE RENMINBI | P. 2|3

ThE GLobaL chaLLENGE

LFF: ThE gLoBALISATIoN oF ThE RMB IS A BIg SToRY ThIS YEAR. WhY NoW?

hh: The opening up of the RMB market conforms with the trend of global economic and financial development. China’s economic strength has increased, while the traditional U.S. dollar based global monetary system is gradually disintegrating: internationalisation of RMB is an inevitable trend.

LFF: WhICh ModEL hAS ChINA FoLLoWEd IN oPE-NINg uP ThE RMB MARkET?

hh: The Chinese government learnt from the experience of the internationalisation of German Mark and Japanese Yen as a reference in proceeding with the internationalisation of RMB. It also took into consideration the cur-rent institutional environment and the limita-tions of policy. The internationalisation of the RMB was carried out at different levels using different models depending on the region and

the stage of development, using a multi-layered strategy: "neighbourhood followed by region; economic entity followed by financial market; settlement valuation followed by cur-rency reservation". In the Asia-Pacific region, particularly, the RMB model of "trade settle-ment + offshore financial market" achieved significant success as a development strategy.

LFF: WhAT SoRT oF NuMBERS ARE WE TALkINg ABouT?

hh: According to the latest data, RMB deposits in Hong Kong were over 500 billion in July 2012, that is, over 8% of total deposits in Hong Kong.

LFF: WhERE doES ThE RMB STANd TodAY, AS A WoRLd CuRRENCY?

hh: The RMB has risen to 15th position as a global payment currency. It is already the world’s third largest letter of credit issuing currency, after the U.S. dollar and the Euro.

MILESToNES IN ThE gLoBALISATIoN oF ThE RMB

Hong huaNG, CEO, Bank of China Luxembourg

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

NovEMBERChina joins WTO

JANuARYIndividual overseas RMB business starts

JuLY1st Issue of an offshore RMB bond

oCToBERStart of RMB FDI

Start of RMB ODI, IPO and QFII

MARChMDEs cancelled

JuLYReform of the RMB exchange rate

JuLYPilot RMB

cross border clearance starts

Out of more than 160 currencies worldwide,

the Renminbi sees the most growth potential. Hong Huang, CEO of the Luxembourg branch

of Bank of China, talks about the prospects for offshore RMB business and what Luxembourg

must do in order to benefit from this trend.

TRENd oF RMB oFFShoRE dEPoSIT AMouNT IN hoNg koNg

6.9

6.8

6.7

6.6

6.5

6.4

6.3

6.2

6.1

Sep

10

Oct

10

Nov

10

Dec

10

Jan

11

Feb

11

Mar

11

Apr

11

May

11

Jun

11

Jul 1

1

Aug

11

Sep

11

Oct

11

Nov

11

Dec

11

Jan

12

Feb

12

Mar

12

Apr

12

May

12

Jun

12

Jul 1

2

Aug

12

Sep

12

Oct

12

Nov

12

TRENd oF dEvALuATIoN oF uSd ovER RMB

2007 2008 2009 2010 2011 2012

700

600

500

400

300

200

100

0

Time depositsSight deposits

Onshore RMBOffshore RMB

LFF: WhAT ARE ThE PRoSPECTS FoR oFFShoRE RMB BuSINESS?

hh: In the context of China's rising strength and the internationalisation of the RMB, the offshore RMB has huge develop-ment potential. The RMB has made consider-able progress in six major directions: current account operations, capitalisation, inter-bank cooperation, inter-governmental cooperation, the overseas RMB market and the Hong Kong offshore financial center. This process has presented a great challenge to the traditional

international financial business, but also provides the banking industry with a precious historical opportunity for development. Hong Kong's offshore market business has created a huge potential overseas RMB market. In view of current market trends, overseas RMB business has potential of further development in the areas of settlement, deposits, loans, bonds, and FDI (Foreign Direct Investment) etc. Meanwhile, compared to the U.S. dollar,

euro, yen and other traditional international currencies, the steady value represented by the strong RMB makes it an important component in the foreign currency invest-ment portfolio of overseas institutional and individual investors.

FX rate

bn RMB

In view of this, I suggested that in order to actively comply with the current situation, the Luxembourg government should seize the opportunity to accelerate the development of the local RMB offshore market, as well as the research and development of related financial instruments. London has already made subs-tantial progress in establishing an offshore RMB market. Luxembourg’s pace could have been faster. However, since London is not in the Euro zone, Luxembourg should still have a good opportunity in future, but the pace must be accelerated in order to gain the up-per hand in the competition to be an offshore RMB financial centre: competitors include Paris, Frankfurt and other financial centres.

Meanwhile, under the impact of persistent European debt crisis and the weakened posi-tion of financial privacy principles, Luxembourg has to take an initiative to seek new impetus for the development of the financial sector. I believe that once an offshore RMB centre in the Euro zone is established, Luxembourg can gain enormous benefit by consolidating the leading role of the financial centre. I am confident in Luxembourg to develop offshore RMB business and will urge Bank of China Luxembourg Branch to become an important force in this field.

RuSSIA

kuWAIT

PhILIPPINES

ThAILANd

AuSTRIA

ChILE

BRAzIL

Prepared to include RMB as part of FX reserve

Converted over 2% reserve to RMB

Building RMB portfolio via its sovereign fund

NIgERIA

Target to convert 10% of reserve to RMB

MALAYSIA

Building RMB portfolio via its sovereign fund

Prepared to engage in mainland bond market

Prepared to include RMB as part of FX reserve

JAPAN

Committed to build a USD 100 bn RMB portfolio

Building RMB portfolio for its reserve

Setting up infrastructure for its RMB portfolio

Source: BOCHK, Media

LFF: do You ThINk ThAT LuxEMBouRg CAN BECoME AN IMPoRTANT oFFShoRE RMB CENTER?

hh: Following the appointment of new leadership in China and the growing interest of the international financial community in RMB, I believe that the pace of internationali-sation of the RMB and its free convertibility on the capital account may be much faster than expected. Therefore, whether you like it or not, the RMB will play an important role in the international monetary system in the near future. It will not only become a major inter-national currency of payment, but we expect that it will also become the official reserve currency of many countries, which is coher-ent with the current desire of international financial markets to establish a new, diversi-fied global monetary system, that includes the U.S. dollar, Euro and RMB.

PLaY Your cardS rIGhT

T2S is not the name of a flashy new car, but an

initiative of the European Central Bank (ECB), which aims to focus on a single pan-European post trade

settlement platform. The post T2S environment will gener-

ate more competition and reduce the number of market players. Benoît Sauvage is an

advisor on financial market regulation at the Luxembourg

Bankers' Association ABBL. In an interview with LFF, he

speaks about the benefits of T2S and the impact on the

Luxembourg financial centre. LFF: WhAT IS T2S?

bS: T2S stands for Target 2 Securities and is an outsourcing project of the European Central Bank (ECB). The idea is that the ECB will undertake the operation of settlement, that is to say the exchange between physical se curities and cash. The ECB will use a single platform, starting at Eurozone level. So far, the process has been highly efficient at Mem-ber State level, but not efficient at all across borders. In other words: it is still relatively expensive. If a person wants to buy German securities in France, there is a cross-border transaction settlement with all sorts of legal, operational and technical compli cations. It is because this market is still not integrated that the ECB has decided to initiate the T2S project.

LFF: CAN You NAME oThER oBJECTIvES APART FRoM CoST SAvINgS?

bS: Facilitating harmonisation of the Europe post-trading environment is another objective. The ECB forces competition between Member States where there was a clear reluctance to converge, such as in tax procedures that burdened the functioning of various oper-ations. Delivery versus payment in central bank money on a real-time gross basis to eliminate counterparty risk is another objective of T2S, as well as optimisation of liquidity via a wide range of liquidity management services.

Benoît SauvaGE, Advisor on financial market regulation,

Luxembourg Banker’s Association ABBL

T2S | P. 4|5

T2S | P. 6|7

LFF: Who WILL uSE ANd Who WILL BENEFIT FRoM T2S?

bS: Each market is organised around an operator, which is a central depository. In Luxembourg we have two operators, LuxCSD and VP LUX. Clearstream is also a central de-pository but a bit special. Other markets are organised in the same way. The problem is that the European Central Bank is taking over the settlement activity that was done by these operators. So the ECB had to ask operators to accept the loss of some of their activities and thus some of their income. The beneficiaries will be the end users such as banks, funds and retail clients through their investment com-pany. The goal is to make the market benefit from this new constellation.

LFF: hoW WELL ARE FINANCIAL INSTITuTIoNS PREPAREd FoR T2S?

bS: At a European level, we see that most of the major players are well positioned and have spent considerable sums since 2006 in terms of lobbying, positioning and reorgani-sation. Nevertheless, the project seems to be far away, because it only becomes effective between 2015 and 2016, depending on the phase of deployment.

WhAT IS ThE IMPACT oN ThE LuxEMBouRg FuNd INduSTRY?

LuxembourgforFinance

Benoît SauvaGE

In Luxembourg we are fortunate to have two CSDs* that have ac-cess to the T2S platform. I would

argue that Luxembourg is actually quite well placed, and the country

has cards to play with a certain level of independence vis-à-vis

the respective parent companies. With the creation of these two CSDs, there are great business development opportunities to

be seized and existing initiatives to be strengthened, like securi-

ties lending that will be easier to do from Luxembourg. If a con-

solidation or concentration wave were to happen, that is directly

related to T2S or linked to UCITS guidelines currently under revi-

sion, Luxembourg retains a lot of advantages, whereas we were in a potentially more complicated

situation in 2006, when the ECB decided to initiate T2S.

* Central Securities Depository

LFF: IS ThE gLASS IS hALF FuLL oR hALF EMPTY FoR LuxEMBouRg?

bS: We have an interesting stake in this project, when we analyse the way institutions are positioning themselves for T2S. The ques-tion is like in a game of cards: you can have great cards, but be a very bad player or have no luck at all. The bigger risk is not that we don't have good cards, but that we don't play our cards well. We have CSDs; we also have a critical mass of assets to use in the context of T2S and such a critical mass attracts more as-sets. What is still missing is a pooling of efforts on issues such as the harmonisation of certain corporate action procedures at an investment fund level and some minor conflicts between the two CSDs and the Luxembourg Stock Exchange and everyone developing models in his corner. But the market is becoming increasingly aware of the importance of T2S and its structure.

LFF: WhAT ARE ThE NExT STEPS?

bS: The ECB, together with its four partners - the four major central banks of France, Ger-many, Spain and Italy – is about to finish the technical development of the platform, which is cumbersome and complex to implement. Validation of parts of the operating platform is foreseen during the coming weeks. The next tests will be conducted in 2013 and in 2014 the ECB will start preparing the early stages of migration. The first phase is scheduled for June 2015 with one to three countries, basi-cally small markets. The idea is to see whether the platform works. This migration will be fol-lowed by two or three waves. The migration of Clearstream and Euroclear will be a challenge, because in terms of size they are mastodons: if they both switch over on the same day in the same wave at the same time, either it will be a success or the functioning of European markets will crumble. T2S will be fully opera-tional by the end of 2016. After that, we'll see how the ECB will extend the model to other markets outside the Eurozone. cW

www.iosco2013.lu

doSSIER ICT | P. 8|9

ICT | NOt A CLOud ON tHE HOrizON

After the 2008 Lehman Brothers crash in the US, Marco Houwen, CEO and founder of LuxCloud felt paralysed for six months. He was neither able to carry out strategic reflection nor make any decisions. At the same time, this was probably one of the most important learning stages of his life. But life goes on. And being a "serial entrepreneur" as he was nicknamed at the PwC "Local to Global" Expo, he has plenty of reasons to feel upbeat. "i am an extremely passionate person and passion drives me to create things. in the future, the global economy will rely on cloud computing. Our goal is to allow companies to quickly launch and profitably deliver the cloud services demanded by small and medium sized businesses (SMBs)".

At PwC’s "Local to Global" Expo, the award for the "Most Promising Company" was presented to Gerard Warrens, CEO of Stealth Software. This is a software company that enables data owners to securely and transparently manage un-structured data. According to Stealth, only one third of data today is protect-ed; ideally, at least half of the information in existence should be protected. Mr Warrens explains that his firm helps companies manage their data volume. One of Stealth’s advantages is that it is able to secure the application layer. "Customers do not have to use gateways or appliances in their environments to create security. We cut out the so-called middleman. that means that hackers cannot get to the data".

In terms of security systems in Europe, 90% of small and medium sized companies do not have tools tailored to their specific size and needs. As the supply for the security of IT assets is mainly designed for large corporations, Phosphorus Technologies from France has launched an innovative kit intended for smaller companies. CEO and founder Malik Dahman explains: "the idea was to create a box with a virtual computer specialist inside. this box will accomplish all the tasks automatically and systematically without people having to handle it. So it becomes a constant companion to the business and is there to secure, share and store data. in the event of a crash, the box will be able to reconstruct the hard drive in 45 minutes and people can start working again".

Dossier ICT

NoT a cLoud oN ThE horIzoN

Using Luxembourg as a platform to boost the global development of

high-tech firms: PwC’s Accelerator has proven that this concept works.

At the second "Local to Global" Expo in Luxembourg, 28 companies

from Europe and North America presented their innovative value

propositions to an audience of over 200 potential partners. LFF spoke

to five of these companies.

SMooTh CRIMINAL

Criminal operating procedures and behaviour have become increasingly organ-ised. Consequently police, confronted by these new risks, have to become more reactive and operational. That is the advice given by Spallian Group, a French software company specialised in security and defence. It has developed a map-ping system independent from technology companies such as Microsoft or Apple. Yann Suissa is Associate and Head Engineer at Armilla, which is owned by its founders, directly and through a holding, the Spallian group. He describes Spal-lian’s uni queness. "We will be able to gather statistics on millions of crimes, some-thing that cannot be done with other programs. We associated a mapping engine with a database and will be able to make advanced geographical statistics. Police forces, intelligence services and public administration are among our customers. in addition, we are working with cities on a project called ‘participatory democracy’, which allows a person to take a picture of a broken street light or a bad road and send it to the mayor in order to improve the comfort and safety of its citizens".

Every day, millions of people inspect the surface of objects with their eyes, because no other solutions are available. But this has changed recently. Visuol Technologies from France has developed a complete range of innovative indus-trial systems, a technology that tunes out ambient light and vibrations. Visuol’s products are used to check the surfaces of planes and cars and to improve the quality of medical implants. Gérard Baseotto, CEO of Visuol Technologies, has a very entrepreneurial view when it comes to describing the financial crisis. "in an innovative firm, you can get out of a crisis very easily. if you come up with a solution relevant to a market crisis, there are interesting cards to play. When a client sees that your technology can give him a quick return on investment, it will open doors for your company and bring in new business".

Developing a breakthrough technology is one thing; raising the necessary funding is another. Among the companies that took part in the first "Local to Global" Expo, 80% of them were able to establish business contacts and 40% of them are already in touch with potential investors. Marco Houwen of LuxCloud praises the support of PwC’s Accelerator, which has helped him to get in touch with the right people to get the fundraising rolling. PwC contacted Visuol Technologies because Laurent Probst, Partner, read an article in a local French newspaper about the company. The CEO of Phosphorus for his part underlined that the team at Accelerator has helped by slicing their project to check their product and perform-

ance. All five companies interviewed agree on one thing: Luxembourg is a stepping stone for new markets and new capital. Gerad Warrens from Stealth Software has concrete examples, "We had very easy access to key decision makers in Luxembourg and that made the process much easier. it’s actually the reason why we moved our company headquarters from Holland to Luxem-bourg. We‘ve also transferred our intellectual Property (iP) to Luxembourg".

Going international is the goal of all the com-panies supported by PwC’s Accelerator, and Luxembourg is the ideal ground to do so, as Yann Suissa of Spallian/Armilla explains.

"Luxembourg and the Greater region also have a pool of universities and polytechnic schools. the local government is interested in our research and development moving here."

The Chinese word for crisis is written by join-ing two ideograms together. The first ideogram stands for "danger" and the second one for "opportunity". When speaking to the entrepre-neurs we met at the PwC’s "Local to Global" Expo, it is clear which one they chose. cW

MoNEY-MAkINg IdEAS

"the idea was to create a box with a virtual computer specialist inside. this box will accomplish all the tasks automatically and systematically without people having to handle it. So it becomes a constant companion to the business and is there to secure, share and store data."

Dossier ICT

GETTING To ThE NExT LEvEL

Laurent Probst, Partner at PwC Luxembourg, is Innovation & R&D

Leader. In an interview with LFF, he speaks about the uniqueness

of PwC’s Accelerator, the one-stop-shop for companies and why

international firms should enter the European market.

doSSIER ICT | P. 10|11

| GEttiNG tO tHE NExt LEvEL

LFF: WhAT ARE ThE vISIoN ANd oBJECTIvES oF PWC’S ACCELERAToR?

LP: It is to assist companies, that have a specific technology and the ambi-tion to become global players. When you look at the business model of some companies, you see that their technology is global right from the start. Consequently, they receive requests from clients coming from all over the world. Based on our experience from past years, we think that there is great potential to help companies from Luxembourg and the Greater Region become international players by assisting them in finding the most relevant management team, the right business partners, the most appropriate corporate structure and funding schemes.

ICT

LFF: WhAT IS A oNE-SToP-ShoP?

LP: The most important thing for a company to be successful is to find the right people, meaning the right staff, the right management and the right board. Then, you need the right corporate structure and the right business partners. The goal is to find the methodology and the process to tackle all these elements with the guidance of the Accelerator.

LFF: WhAT IS ThE goAL oF YouR "LoCAL To gLoBAL" ExPo?

LP: There are two goals: funding and business. It is about preparing com-panies to meet people in a professional and secure environment. In a 3-minute speech, they present their business case and then they can have one-to-one meetings with investors or business partners. This Expo helps companies get more visibility and credibility and open up their network on an international scale. It was amazing to see how many people from Scandinavia, Asia, and the Middle East were present at our Expo, which takes place twice a year.

LFF: WhAT IS ThE dIFFERENCE BETWEEN AN INCuBAToR ANd AN ACCELERAToR?

LP: The incubating period is when the company is under construction. The technology, the market approach and the business model still have to be validated. It is about getting the first client. At PwC’s Accelerator, we work on the execution plan. The challenge is to get 50 clients in the next two to three years. It is about scalability and internationalisation. We are also partnering with a lot of incubators in Europe and beyond because we are the next stage for companies leaving the incubation period.

LFF: dESPITE ITS PRoBLEMS, EuRoPE IS AN IMPoRTANT MARkET FoR INTERNATIoNAL CoMPANIES. WhY IS ThIS?

LP: There are three major reasons. The first is that it is still one of the largest international markets in terms of potential. Companies cannot avoid Europe today. Knowledge, competences and skills, in other words human resources, are the second reason why. If you need a team of engineers, you can find them in Europe at a more affordable cost than in Silicon Valley. The third reason is the quality of the technologies.

We play the role of a soft landing place

for US, Russian, or Asian companies

who want to enter the European market.

They generally don’t need funding and

they usually have very good manage-

ment teams. What they need are new

clients, and the proper teams to execute.

This is where we can help. Generally,

we give them the supportive business

environment they need when they land

in Luxembourg. cW

PWC’S ACCELERAToR WoRkS BoTh WAYS. hoW ShouLd INTERNATIoNAL CoMPANIES "ATTACk" ThE EuRoPEAN MARkET?

LuxembourgforFinance

Laurent ProbST

Laurent ProbST, Partner,

PwC Luxembourg

doSSIER ICT | P. 12|13

| tHE BuSiNESS vALuE Of fuN

"Gamification is taking elements of game play that you find in traditional games and incorporating them in non-game scenarios, such as marketing or sales", ex-plains Troy Bankhead, Head of Marketing and Communication at KNEIP*, and one of Luxembourg’s experts in this matter. "it’s taking the psychological and behavioural elements that make games attractive and applying them to other domains".

The principles of gamification operate at a deep psychological level, tapping in to behavioural drivers that humans have always had. Who doesn’t long for recognition, status or advancement? That’s why gamification can be applied to literally every sector, even the more "serious" sectors such as banking. It transcends classical marketing tools like advertisements, for instance.

"Gamification might be easier to apply in the retail sector, simply because there is a wider market and it is closer to traditional marketing", Troy says. "But in private banking, you’re still contacting people. People in the luxury and high net worth markets are particularly susceptible to status. You don’t just hand over your money and that’s it. With gamification, you figure out ways to make nor-mally mundane tasks or processes more interesting and engaging for the client, so that a transaction satisfies more of those deep drivers that we all have".

Dossier ICT

ThE buSINESS vaLuE oF FuN

Since time immemorial, people have played games. Children play

in the school playground, board games and card games allow family and friends to challenge each other and video games and social games

– which can be found in droves on social networks – enable even the solitary person to participate. All those games have one thing in common: they are addressing core

human drivers that attract us to play. In recent years, the marketing industry has increasingly made use

of game psychology, naming this strategy "gamification". The sector

has benefitted hugely from technological developments and

mobile devices.

"Gamification might be easier to apply in the retail sector, simply because there is a wider market and it is closer to traditional marketing."

ICT

* A fund management data publication and reporting company

Gamification is not just a one-off campaign; on the contrary, it should be inte-grated into the on-going service of a company. Even in the most B2B environ-ment, the concept works. "the one thing that makes gamification applicable to everyone is that no matter what you’re doing, no matter what business you are in, we’re all still guys and girls, we’re all still human, we’re all still driven by the same things. Any time there is a goal, any time there is some behaviour you want to have happen or some engagement that you want to have happen, gamification is applicable".

Thus, online video games are the most obvious tools of gamification. The on-line video sector has naturally incorporated all its elements into and/or around video games and transferred elements into forums and communities, where people stay in contact, even if they are not actively playing. There they can help each other while discussing difficult steps of a video game, for instance. Troy points out that altruism is a key element of gamification.

Two other key elements are autonomy and, linked to that, feedback. "it’s one of the gamification mechanisms that everyone should apply in their lives: how feedback is given is something that video games have mastered. When we get into autonomy, it’s about being able to master skills, about being given choices and being able to make those choices ourself, to see the consequences and the rewards of each. it also ties into achievement, being able to break up tasks into their component parts and giving feedback on each point. these aren’t new principles. What games have done is show how to do it better. in video games, there are always consequences to actions. You may die or loose your power, you can screw up, but you learn from your mistakes and do it again until you do it right. in life and in business this is not possible".

Video games help people to fail gracefully. A child that is learning and grow-ing is supposed to make mistakes. But what about the parents; are they al-lowed to fail, too? Troy concludes: "if a video game judged you for failing, you wouldn’t play it. the feedback element is very important, because people need it; we, as humans, need to feel we are not being judged for making errors. it’s not about failure, it’s about learning and it’s about mastery". Gamification is about making life more fun and challenging. It is a method well worth applying to life. Ea

"if a video game judged you for failing, you wouldn’t play it. the feedback element is very important, be-cause people need it; we, as humans, need to feel we are not being judged for making errors. it’s not about failure, it’s about learning and it’s about mastery."

"the one thing that makes gamification applicable to everyone is that no matter what you’re doing, no matter what business you are in, we’re all still guys and girls, we’re all still human, we’re all still driven by the same things."

"it’s taking the psychological and behavioural elements that make games attractive and ap-plying them to other domains."

With more than 100,000 charter holders

around the globe, the Chartered Financial Ana-

lyst (CFA) designation has become one of the most respected and recognised

investment credentials. The Luxembourg CFA society

will celebrate its 10th anni-versary in 2013. Earlier this year, in May 2012, Philippe Bernard took over the reins

from Léon Kirch, who led the local society for nine years. We spoke to the new CFA chairman, who works for a large Swiss banking group,

about his goals, about ethical standards and CFA-sensitive

companies.

CFA | P. 14|15

ExcELLENcE IN buSINESS aNd EThIcaL STaNdardS

Go haNd IN haNd

LFF: WhAT doES CFA STANd FoR?

CFA stands for Chartered Financial Analyst. It is a distance learning investment credential administered by the CFA institute, which is a non-profit organisation. What is remarkable about CFA is that the curriculum you need to cover to earn the charter is set by practi-tioners, so it is not an academic credential. It is a program you do alongside your daily job. You have not only to pass three exams; you also need to have professional experience and adhere to the Code of Ethics and Standard of Professional Conduct. CFA is recognised as the gold standard regarding the investment side of the industry. The majority of the more than 100,000 charter holders now live outside the United States, where the CFA institute was launched. This year, 250,000 candidates around the world attended the exams; 251 in Luxembourg.

LFF: ThE LuxEMBouRg CFA SoCIETY WILL CELEBRATE ITS TENTh ANNIvERSARY IN 2013. hoW hAS IT dEvELoPEd ovER ThE PAST dECAdE?

The CFA holders in Luxembourg came from all over the world. They wanted to create a pro-fessional career for themselves in Luxembourg but also to make a contribution to the local financial industry. They decided that the best way would be to set up a local society, which is a non-profit organisation. Today we have some 200 members of whom 90% are CFAs.

Philippe bErNard, Chairman, Luxembourg CfA society

"My personal goal is to manage a transition of generations, continue attracting motivated volunteers."

LFF: WhAT CAN ThE CFA SoCIETY oFFER To ITS MEMBERS?

Our first mission is to support members and CFA candidates as well as other investment professionals in pursuing professional excel-lence and ongoing education along their careers.

The special thing about our activities is the importance of ethics and its promotion.

The candidate can take the exam in Luxem-bourg, so he doesn’t need to travel abroad. Regarding events, we organise around ten conferences per year; networking events are also an important part of what we do. These events have become more important since the beginning of the crisis in 2008. Being a CFA charter holder doesn’t mean not losing your job, unfortunately.

LFF: You Took ovER AS ChAIRMAN oF ThE LoCAL CFA SoCIETY ThIS YEAR. WhAT ARE YouR goALS?

As a non profit organisation, Luxembourg CFA society is living through the enthusiasm, dedication and creativity of the volunteers. Luxembourg has achieved a lot and is quite active compared to others countries.

My primary objective will be to keep up this high level of activity serving our members. It is quite challenging to organise one event per month, support candidates with informa-tion and exam preparation courses and mock exams. Last but not least, promotion of the CFA charter and values, like the asset manage-ment code of conduct, represent an important part of the activity. Recently, the CFA society became country sponsor for GIPS (Global Investment Performance Standards), it was the result of the work of a group of volunteers.

Fortunately, the Society is not dependent on one person; a board of ten people sup-ports me together with volunteers. We work as a team and it is a good example of the power that people with different back-grounds, horizons and cultures sharing the same values can achieve. My personal goal is to manage a transition of generations, continue attracting motivated volunteers. New blood is welcome to challenge past ideas and start new initiatives.

The CFA program is first and foremost a personal experience. In order to succeed you need de dication and the willingness to study in your spare time. You have six months to prepare each exam and you need commitment and endurance to pass the three levels. So it is a way of investing in your own human capital. Once you are past the exams, however, you discover that you are part of an impressive world network and that the journey continues.

For employers, the European Investment Bank (EIB) employs the largest number of CFAs in Luxembourg. To me, that is a proof of their excellence and the excellence of our mem-bers too. All in all, more than 90 companies have hired at least one CFA charter holder. It is remarkable how widely spread CFAs are in different areas of the financial industry in Luxembourg.

Since the beginning, a number of companies and institutions have been supporting our activities and are contributing to the promotion of business excellence in Luxembourg.

ARE ThERE CoMPANIES oR FINANCIAL INSTITuTIoNS WhICh ARE CFA SENSITIvE IN LuxEMBouRg?

LuxembourgforFinance Philippe bErNard

LFF: CFA INSTITuTE STANdS FoR EThICAL ExCELLENCE: WhERE doES EThICAL CuLTuRE START IN A CoMPANY?

For me it starts at the level of the individual. That means, for instance, that you have to adhere to the Code and submit each year a Professional Conduct Statement disclosing any investigations or complaints relating to professional conduct. There is a disciplinary committee, so you can lose your CFA desig-nation if your behaviour was inappropriate. It is not only about ethics, but also about how you behave as a professional. That is more important than ever. The public has lost trust in financial institutions because of the crisis. We can only regain that trust by a better standard of behaviour by individuals working in the industry.

LFF: WhAT IS MoRE IMPoR-TANT FoR AN INvESTMENT PRoFESSIoNAL: ThE PRo-TECTIoN oF hIS CLIENT oR duTY To hIS EMPLoYER?

It is clear, and it is also stated in the CFA standards, that the client comes first. The reason the CFA exams were first launched in 1962 - so it’s their 50th anniversary - is that this ethical question is at the heart of the investment process; giving advice to an investor or managing his assets. So the CFA Code of Ethics was well in advance of a lot of regulation. The client is first in everything you do as an investment professional: in the way you present your information, in the way you take decisions and when you trade, you do it for your client first. This doesn’t imply that you don’t also have a duty to the employer. For the employer, it is a question of reputa-tion; if you behave inappropriately, you hurt not only the client, but also the employer. As a financial services institution, if you lose your reputation and public trust, you are out of business. So the client protection and loyalty to the employer are not contradictory values. cW

dIarY

FINANCIAL MISSIoN To ASIA

14-18 JaNuarY 2013 | aSIa

Luxembourg for Finance is organising a financial mission to Hong Kong, Beijing and Shanghai from 14 to 18 January 2013 led by Mr Luc Frieden, Minister of Finance and Chairman of Luxembourg for Finance.

Luxembourg for Finance will be present with a booth at the Asian Financial Forum on 14 and 15 January 2013. On 15 January, Luxembourg for Finance will also organise a workshop within the Asian Financial Forum.

STATE vISIT To RuSSIA ANd TATARSTAN

ENd oF FEbruarY 2013 | ruSSIa aNd TaTarSTaN

On the occasion of the State Visit to Russia and Tatarstan, Luxembourg for Finance will organise a financial seminar in Moscow and Kazan.

MIPIM (INTERNATIoNAL REAL ESTATE ShoW)

13 March 2013 | LuxEMbourG

LFF is organising a conference on the Real Estate in the framework of the MIPIM.

> For further information, visit our website: www.luxembourgforfinance.lu

uPCoMINg LFF EvENTS

WE ShaLL bE oNE PErSoN

Often wrongly considered as an American, one of

the most important exhibition designers and photographers of the 20th century is actually

a Luxembourger. Born in 1879 in the village of Bivange in

Luxembourg ( 1973 in the US) to a modest family

of day labourers, Edward Steichen immigrated with his parents to the United States

in 1881, where his father found work in a copper mine

in Hancock, Michigan.

Strongly shaped by a life full of privations and a mother who cultivated the idea of respect, Steichen went on to develop a photographic exhibition that until now has not been sur-passed – and probably never will be. As direc-tor of the photography department of the Museum of Modern Art in New York (MoMA), he designed the famous photo exhibition "the family of Man", that was shown in New York in 1955 and attracted more than 10 million spectators. the family of Man is the artistic embodiment of an image of humanity that understands mankind as one family belong-ing together, whatever nationality, race or

religion. In his exhibition, Edward Steichen combines iconic photos of various photo-graphers with the most important topics in a man’s life: birth, work, war or love, to name only a few. By withholding the identity and location of his subject – Steichen only reveals the name of the photographer and doesn’t offer any kind of explanation to the photos – he places the human being on a pedestal, detached from time and situation. The exhibi-tion evokes a sense of comfort and hope: the spectator is left with the soothing feeling that he, too, belongs to the family of man.

EdWARd STEIChEN | P. 16|17

Arthur rothstein,

farmer and sons walking in the face of a dust storm. Cimarron County, Oklahoma, April 1936.

"At that time, the idea of humanism was controversial", says Jean Back, Director of the Luxembourg National Audiovisual Centre (CNA). "People were fed up with the Second World War. this was one of the reasons that the exhibition was so successful. What Steichen did was a revolution. He utilised the medium of photography, which by nature is a very intel-ligent medium, to create a universal image of mankind, a canon of humanity". By arranging the photos in a composition outside their ini-tial context, he naturally attracted critics who said that the photos were torn out of their real and social context. "in a way, the family of Man reflects Steichen’s American view of the world. But it remains the world’s largest and most important photographic exhibition".

Steichen’s humanistic approach is illustrated by a scene recorded in his biography. Once, when he was a child, his mother gave him a lesson in respect after he had called another child "You dirty little kike". The lesson his mother gave him, "lasted very, very long", Steichen remembered. "that scene was an important step in his personal development", Jean Back says. "A seed was sown that was to become the family of Man. He wanted to fill up the craters left behind by the war".

The feeling of consolation produced by the family of Man came at the right time, in the middle of the Cold War. "in those days, pho-

tography had a totally different impact", Jean Back explains. Steichen himself called this exhibition "the most important undertaking of my career". Then, in 1962, he added "the Bitter Years".

The latter was Steichen’s last exhibition for the MoMA and can be seen in a restored wa-ter tower (Waassertuerm), next to the CNA in Dudelange (Luxembourg). "in the Bitter Years, Steichen again tells his own story, but this time the pictures are more social: the focus is on people who have to survive in difficult situa-tions". Once more, Steichen masked out the captions to the photos.

the Bitter Years shows the United States of the 1930, during the Great depression. Out of 250,000 photos made by professional photographers, he composed an image of mankind that can survive sorrow. The photos were the result of on an order by President Franklin D. Roosevelt to the Farm Security Administration (FSA) that they should docu-ment the poverty in the Mid-West of the US, in order to promote legislation in aid of the thousands of people who travelled through the country in search of a job. Though each individual photo is very intense, the exhibi-tion again unfolds its real beauty in the com-position. The State Street Bank of Luxemburg supported the project on its opening in September 2012.

"in a way, the family of Man reflects Steichen’s

American view of the world. But it remains the world’s largest and most important photographic

exhibition."

EdWARd STEIChEN | P. 18|19

dorothea Lange,

Migratory cotton picker. Eloy, Arizona, 1940.

© the dorothea Lange Collection, Oakland Museum of California, City of

Oakland. Gift of Paul S. taylor.

"Edward Steichen acted very courageously with the work of others, in order to utilise photogra-phy for his own purposes. He took liberties that nowadays would be unthinkable: he cropped photos and combined them with works of other photographers, just as he wished. He commu-nicated with the help of photography".

Steichen came to photography through paint-ing. Working in a graphic design studio, he initially designed advertisements for commer-cial products. Also known as a famous fashion photographer, he knew how to commercialise art. "He knew that photos could purvey ideas and tell stories. Several photos together make a story. He mastered the art of transforming photos into a statement, depending on the situation in which they are shown, like nobody else". His feeling for photography as a mass medium made him produce ten copies of the family of Man. After the end of the New York exhibition, they toured around the world for 8 years and finally ended up in the castle of Clervaux in the North of Luxembourg, where they will be exhibited, following restoration, from summer 2013 on. It was the love for his country of origin that made Steichen choose the Grand Duchy and agree with the castle of Clervaux as a permanent place of exhibition during his lifetime.

Jean Back, who is also curator of the family of Man, is convinced that Edward Steichen’s oeuvre will remain unique. "i don’t think that an exhibition like the Bitter Years can be repea-ted. today’s poverty is very different from the poverty of the Great depression. People can put up a fight nowadays. today, photography is valued completely differently. Many topics are covered, but this thorough documentation of a situation doesn’t exist anymore".

As far as the family of Man is concerned, it is even more doubtful whether such an exhibi-tion - the concept of a united family of man - could be repeated in a photo exhibition, not least because we are saturated with pictures that know no more limits to what can be seen. Jean Back concludes: "the naivety with which Steichen designed the exhibition was legitimate, at that time. However the idea continues to stimulate discussions: too senti-mental and being an American point of view, for the great majority of people, it has kept this soft light for hope and peace. How would you portray such an idea today? Certainly not with the medium of photography alone. today, showing reality in this way doesn’t make sense anymore. Photo graphy unfolds its magic when the photographer manages to articulate his story. Only a few can do so". Ea

www.cna.lu | www.steichencollections.lu

"i don’t think that an exhibition like the Bitter Years can be repeated. today’s poverty is very different from the poverty of the Great depression. People can put up a fight nowadays. today, photography is valued completely differently. Many topics are covered, but this thorough documentation of a situation doesn’t exist anymore."

© CNA, romain Girtgen

LIFESTYLE

ImpressumEditor: Luxembourg for Finance • 12, rue Erasme • B.P. 904 • L-2019 Luxembourg • Tel. (+352) 27 20 21 1 • Fax (+352) 27 20 21 399 • Email lff@lff.luResponsible for publication: Jean-Jacques Picard. Editorial Team: Elisabeth Adams (EA), Eleanor de Rosmorduc (ER), Christian Welter (CW). Circulation: 6,000 – quarterly. Photos: all rights reserved

WE WILL RoCk You

16-21 APRIL 2013

Rockhal

ONE DREAM, ONE VISION, ONE SMASH HIT! Queen & Ben Elton’s WE WILL ROCK YOU has been seen by an audience of 12 million in 17 countries. The show is featuring 24 of Queen’s greatest hits. And while the record-breaking run at London’s Dominion Theatre continues, the show is embarking on its first ever world arena tour.

www.rockhal.lu www.atelier.lu

BRAvE NEW WoRLd

FoLkERT dE JoNg

23 MARCh – 8 SEPTEMBER 2013

MudAM

The sculpted paintings of Dutch artist Folkert de Jong are, at first glance, attractive and dis-concerting at the same time. Transforming the exhibition space into a real theater stage, he invents little realistic scenes he produces in natural scale. Often inspired by historical events or artistic periods, they display them-selves in complex compositions. Invited by Mudam, the artist produces a series of new pieces especially conceived for the Grand Hall.

www.mudam.lu

21 & 22 JANuARY

Abbaye de Neumunster

The most extraordinary science fiction satire of the century comes to the stage in a new adaptation by TNT BRITAIN. Aldous Huxley wrote BRAVE NEW WORLD in 1931 and predicted a future where pain, old age, unemployment, poverty, crime and war have been abolished. This production wraps the Shakespearean nightmare in contemporary form, drawing on talk show. This is science fiction far removed from STAR WARS. This BRAVE NEW WORLD is upon us.

www.ccrn.lu

LES 5 gouRMETS Eric Truffaz

3 FEBRuARY 2013

Trifolion

Created in 2000, the brass quintet “Les 5 gour-mets” is nowadays one of the most interesting brass ensembles in Luxembourg. Its focus lies on the research of a refined approach to brass chamber music by the subtle blend of the dif-ferent colours and timbres of its instruments. Interested in music of all styles and periods, the quintet «les 5 gourmets» performs in concerts alone or in collaboration with other instruments like organ, harp or percussion.

www.trifolion.lu

12 APRIL 2013

den Atelier

French trumpeter Erik Truffaz is a pioneering jazz figure. But his music is not too cerebral. Truffaz says of himself that he listened to Led Zeppelin much more than to Miles Davis when he was younger. His tunes teem with pockets of tension/release, rich sound textures, distor-tion and even Hendrixian guitar-like exchanges. He creates a meld of jazz, pop and rock music that is dance-floor hip, rock-house blazing and new-jazz cool.

www.atelier.lu