CSSF Tokenisation FAQ: Luxembourg investment funds may issue native DLT units

On 2 October 2026, the Luxembourg Commission de Surveillance du Secteur Financier (the “CSSF”) published the first version of its new FAQ on tokenisation (the “FAQ”), providing important clarifications on the use of distributed ledger technology (“DLT”) for the issuance and administration of units and shares of Luxembourg investment funds. 

The FAQ confirms, in particular, that Luxembourg undertakings for collective investment (“UCIs”) may issue units or shares natively on a distributed ledger, while clarifying the respective roles of UCI administrators (“UCIAs”), control agents and investment fund managers (“IFMs”). 

The guidance reflects the CSSF’s technology-neutral approach: the use of DLT does not, in itself, alter the regulatory framework applicable to the relevant investment fund or the legal nature of the units or shares issued. 

Luxembourg investment funds may issue native tokens  

The most significant clarification is the CSSF’s express confirmation that a Luxembourg UCI may issue native units or shares solely on DLT in the form of tokens. 

The possibility of using DLT is therefore not limited to the tokenisation of securities initially issued through traditional infrastructure. Units or shares may be issued natively using DLT, provided that the proposed operating model complies with the regulatory framework applicable to the relevant UCI. 

Importantly, the CSSF distinguishes the technological infrastructure used for issuance and record-keeping from the legal form of the securities themselves. 

Tokenised units or shares may accordingly be issued either in registered form or in dematerialised form within the meaning of Luxembourg company law. The fact that DLT is used does not, as such, determine their legal form. 

For registered units or shares, a UCIA performing the registrar function may use DLT to maintain the register of unitholders or shareholders. 

Where units or shares are issued in dematerialised form using DLT, the requirements of the Luxembourg law of 6 April 2013 on dematerialised securities, as amended (the “Dematerialised Securities Law”), must additionally be complied with. 

Fund tokenisation does not eliminate the registrar function 

A second important clarification concerns the interaction between the control agent introduced under the Luxembourg framework for dematerialised securities and the traditional registrar function applicable to investment funds. 

The CSSF makes clear that appointing a control agent does not remove the requirement to have a UCIA responsible for the registrar function within the meaning of Circular CSSF 22/811. 

The reason is essentially functional: the responsibilities attributed to a UCIA performing the registrar function under Circular CSSF 22/811 extend beyond those entrusted to a control agent under the Dematerialised Securities Law. 

An eligible entity, for example, an IFM, registrar agent or credit institution authorised as a UCIA, must therefore continue to perform the residual registrar tasks required under Circular CSSF 22/811. 

This does not necessarily mean that two separate service providers must be appointed. The CSSF expressly confirms that the same entity may perform both functions, provided that it holds all required licences and authorisations. 

Traditional and tokenised Luxembourg fund units may coexist

The FAQ also addresses a potentially important operating model for the Luxembourg fund industry: a UCI issuing both traditional and tokenised units or shares. 

The CSSF accepts that multiple UCIAs may perform the registrar function for the same UCI, for example where one administrator deals with traditional units or shares while another deals with tokenised ones. 

In particular, the allocation of responsibilities must not create a degree of fragmentation that makes coordination and overall supervision difficult or impossible, or unnecessarily increases costs through duplication or excessive operational complexity. 

The operating model and its implications must also be adequately disclosed to investors. The offering documents must identify the entities acting as UCIAs and their respective functions. 

Crucially, there must remain a consolidated view of all units or shares issued by the UCI, allowing the other UCI administration functions to be properly performed, including NAV per share calculations, distributions and capital calls. 

The IFM and/or the UCI must also ensure that additional risks resulting from the division of responsibilities between several UCIAs are appropriately managed. 

Tokenisation therefore allows for greater flexibility in the fund’s operating infrastructure, but does not dispense with the need for clear responsibility, consolidated information and effective oversight. 

Control agents: regulatory process, outsourcing and DORA 

The FAQ also provides practical guidance for entities intending to act as control agents under the Dematerialised Securities Law. 

Following the preliminary presentation of their operating model to the CSSF, such entities must notify the CSSF at least two months before commencing the control agent activity. Importantly, this period only starts once the CSSF has confirmed that the notification is complete. 

The CSSF therefore encourages early engagement in relation to tokenisation projects. The proposed operating model should provide the CSSF with a comprehensive view of the lifecycle of the relevant assets, including their issuance, trading, settlement and distribution, the legal qualification of the tokens and rights attached to them, the respective roles of the stakeholders and the relevant contractual and outsourcing arrangements. 

The FAQ further confirms that DORA requirements apply to entities acting as control agents, including in respect of their control agent activities. 

While a control agent may rely on third-party service providers for technical support, including smart contract development or administration, the CSSF considers it highly likely that the control agent activity qualifies as a critical or important function (“CIF”) under DORA. The use of ICT third-party arrangements in support of that activity may therefore trigger the requirements of Circular CSSF 25/882, including the applicable notification requirements. 

Where an applicant concludes that the control agent activity does not qualify as a CIF, the CSSF expects a robust justification to be provided when the operating model is presented. 

Practical implications of the CSSF Tokenisation FAQ for the Luxembourg fund industry 

The FAQ provides useful regulatory clarity for Luxembourg investment funds considering DLT-based issuance models. 

In particular, it confirms that existing Luxembourg fund structures can accommodate units and shares issued natively on DLT, subject to compliance with the legal and regulatory framework applicable to the relevant fund and its service providers. 

The use of DLT does not, however, displace the existing allocation of regulatory responsibilities. Registrar functions, investor records, consolidated oversight, operational risk management, outsourcing requirements and DORA compliance remain relevant to the operating model. 

For fund sponsors, IFMs and service providers considering tokenisation, the question is therefore no longer simply whether DLT may be used – the CSSF has now expressly confirmed that it may – but how the proposed DLT infrastructure should be integrated into the fund’s existing legal, regulatory and operational framework. 

Chevalier & Sciales’ Investment Management team remains available to discuss the Luxembourg legal and regulatory implications of this new CSSF guidance for investment funds and their service providers.