Tokenised Funds Gain Greater Certainty: CSSF Issues First Guidance on DLT-Based Fund Units in Luxembourg

On 2 October 2026, the Commission de Surveillance du Secteur Financier (CSSF) published its first FAQ on Tokenisation (Version 1), providing practical guidance for Luxembourg undertakings for collective investment (UCIs) and market participants considering the use of distributed ledger technology (DLT) to issue, store, and transfer fund units or shares. The FAQ addresses recurrent questions raised with the CSSF and covers two principal areas: the tokenisation of investment funds and the requirements applicable to control agents under Luxembourg's dematerialised securities framework. While the FAQ does not constitute an exhaustive guide, it provides critical signposts for fund managers, administrators, depositaries, and service providers navigating this evolving area.

 

Luxembourg UCIs Can Issue Native Tokens

Consistent with its technologically neutral approach, the CSSF has affirmed that Luxembourg UCIs can issue native units or shares using DLT — i.e., units/shares that are natively issued solely on DLT in the form of tokens — provided that the proposed operating model complies with the regulatory framework applicable to the relevant UCI. Tokenised units/shares may be issued in either registered or dematerialised form within the meaning of the Law of 10 August 1915 on commercial companies. Importantly, the use of DLT as the issuance and record-keeping infrastructure does not determine the legal form of the underlying securities, or vice versa.

For UCIs issuing registered units/shares, any UCI administration agent (UCIA) performing the registrar function may use DLT to maintain the unit/shareholder register. For UCIs issuing dematerialised units/shares using DLT, an eligible entity (e.g., the investment fund manager (IFM), a registrar agent, or a credit institution authorised as UCIA) will need to act as UCIA for the registrar function. In addition, market participants must comply with all requirements applicable to dematerialised securities under the Dematerialised Securities Law (the Law of 6 April 2013 on dematerialised securities).

 

Appointment of a Control Agent Does Not Replace the UCIA Registrar Function

The CSSF clarifies that the appointment of a control agent within the meaning of the Dematerialised Securities Law does not dispense with the requirement to appoint a UCIA in charge of the registrar function as set out in Circular CSSF 22/811. The tasks covered by the UCIA in its registrar function go beyond what is required of a control agent under the Dematerialised Securities Law. That said, nothing prevents a single entity holding all appropriate licences and authorisations from performing both functions — for instance, a credit institution authorised as both a UCIA and a control agent.

 

Multiple UCIAs Permitted for Hybrid Token/Traditional Structures

Where a UCI issues both tokenised and traditional (non-tokenised) units/shares, multiple entities may act as UCIAs in charge of the registrar function, subject to five cumulative conditions:

1. No fragmentation: The division of tasks between UCIAs must not render the exercise of the coordination and general supervisory function difficult or impossible, or unnecessarily increase costs by unjustified duplication or complexity.
2. Investor disclosure: The IFM must ensure that the operating model, as well as its potential risks and implications, is adequately disclosed to investors, and the names of all entities acting as UCIA, along with their respective functions, must be clearly set out in the offering documents.
3. Consolidated view: An entity (the IFM and/or one of the UCIAs) must maintain a consolidated view of the units/shares issued by the UCI to ensure that all other relevant UCI administration functions can be performed (e.g., NAV calculation, distributions, capital calls).
4. Risk management: The IFM and/or the UCI must ensure that any additional risks arising from this division of responsibilities are properly managed.
5. Full legal compliance: Full compliance with all relevant provisions of applicable law must be ensured, including, where applicable, the obligation to maintain a register of all registered shares at the UCI's registered office.

 

Action Items and How We Can Help

• Drawing on the CSSF's guidance, stakeholders involved in or considering fund tokenisation in Luxembourg should prioritise the following steps:
• Engage early with the CSSF. Initiate a preliminary dialogue with the CSSF before commencing any formal procedures, providing a comprehensive description of the proposed project and the full lifecycle of the tokens involved.
• Determine the legal form of tokenised units/shares. Assess whether tokenised units/shares will be issued in registered or dematerialised form, and ensure the proposed operating model complies with the applicable regulatory framework for each form.
• Confirm UCIA registrar appointment. Regardless of whether a control agent is appointed, ensure that a properly authorised UCIA is in place for the registrar function as required by Circular CSSF 22/811.
• For hybrid structures, ensure a consolidated register view. Where multiple UCIAs serve the registrar function for both tokenised and traditional units/shares, designate the entity responsible for maintaining the consolidated register and ensure the five cumulative conditions set by the CSSF are met.
• Update offering documents. Disclose the operating model, associated risks, and the names and functions of all UCIAs in the UCI's offering documents.
• Plan the control agent notification timeline carefully. Allow at least two months for the CSSF control agent notification, and factor in additional lead time where outsourcing or ICT third-party arrangements are involved, as related CSSF notifications may need to be submitted at least three months before the start of the arrangement (or one month for a Luxembourg support PFS).
• For EEA entities, coordinate with home-state regulators. Inform the competent authority of the home Member State before notifying the CSSF and ensure adequate cooperation arrangements are in place.
• Apply DORA compliance frameworks to control agent activities. Ensure that information processing systems and control and security arrangements are suitable for control agent duties, taking into account applicable DORA requirements.
• Assess critical or important function (CIF) status and ICT third-party notifications. The CSSF considers it highly likely that the control agent activity qualifies as a CIF under DORA. Where ICT third-party arrangements support the activity, comply with Circular CSSF 25/882 and make the required CSSF notification; any contrary assessment should be supported by a robust rationale.
• Seek authorisation for substantial changes to the operating model. UCIAs planning substantial changes as part of their use of DLT must apply to the CSSF for authorisation, in accordance with Circular CSSF 22/811.
• Monitor CSSF updates. The FAQ will be updated progressively as further issues arise; stakeholders should regularly check the CSSF website for new guidance or changes in position.

 

Looking Ahead

The publication of the CSSF FAQ signals the regulator's willingness to provide a clear pathway for the adoption of DLT-based fund structures in Luxembourg, while maintaining robust investor protection and regulatory standards. The FAQ explicitly acknowledges the potential benefits of tokenisation — particularly in terms of efficiency and cost — and reflects the CSSF's commitment to a technologically neutral supervisory approach.

At the same time, the FAQ underscores the complexity of the regulatory landscape. Market participants must navigate overlapping requirements under the Dematerialised Securities Law, Circular CSSF 22/811, the Blockchain Law IV (Law of 20 December 2024), and DORA, among other frameworks. As highlighted in recent European-wide regulatory trends — including the EU's Digital Omnibus proposals and the continued enforcement of digital resilience obligations under DORA and NIS2 — the interaction between digital innovation and regulatory compliance remains a critical area of focus for supervisory authorities.

We anticipate that the CSSF will continue to refine its guidance as the market develops and new operational models are presented. Stakeholders should treat Version 1 of the FAQ as a foundational document and engage proactively with the CSSF on project-specific questions.