The CSSF published on 24 November 2014 the Circular CSSF 14/597 (the “Circular”) addressed to all credit institutions and professionals performing lending operations updating CSSF Circular 12/552 on the central administration, internal governance and risk management by the implementation of the recommendation issued in December 2012 by the European Systemic Risk Board (ESBR) on funding of credit institutions (ESRB 2012/2).  The Circular entered into force on 31 December 2014. Amongst other, a new Chapter 6 is introduced in Part III of the CSSF Circular 12/552 regarding the implementation of a general framework in respect of the risk management policies in relation to asset encumbrance. Therefore, credit institutions shall set-up procedures and controls that ensure that risks associated with collateral management and asset encumbrance are adequately identified, monitored and managed.