Block By Block: CSSF Clarifies Crypto-Assets Framework For Luxembourg Funds

Background

The FAQ has been updated to reflect the entry into force and application of Regulation (EU) 2023/1114 on markets in crypto-assets ("MiCAR") and introduces several changes that soften the CSSF's position on the scope and conditions applicable to undertakings for collective investment in transferable securities ("UCITS"), alternative investment funds ("AIFs"), and their investment fund managers ("IFMs") when investing in crypto-assets.

CSSF FAQ

Terminology Change

Throughout the FAQ, the CSSF has replaced the term "virtual assets" with "crypto-assets", as defined in Article 3(1), point 5 of MiCAR.

Indirect Crypto-Asset Exposure Now Permitted for UCITS

One of the most notable developments is the CSSF's departure from its previous blanket prohibition on UCITS investing (directly or indirectly) in crypto-assets. Subject to certain conditions, UCITS may now obtain indirect exposure to crypto-assets of up to 10% of their net asset value ("NAV"). In particular: