FAQ Virtual Assets – Undertakings for collective investment (Updated on 18.12.2023)

Th CSSF published an update to its FAQ Virtual Assets – Undertakings for collective investment. The FAQ covers the regulatory framework for investment in virtual assets by UCITS and AIFs in Luxembourg. It outlines the restrictions on UCITS and the conditions under which AIFs may invest in virtual assets. The document also details the authorization requirements for investment fund managers, considerations for mitigating money laundering and terrorist financing risks, the role of depositaries for funds investing in virtual assets, and the AML/CFT due diligence expected from investment fund managers.
In its current Version 5, published on 18 December 2023, Question 3 „Do Luxembourg Investment Fund Managers need any authorisation for the management of virtual assets?“ was amended. Here a summary of its content:
IFMs intending to manage AIFs that invest in virtual assets need to obtain prior authorization from the CSSF for managing AIFs investing in virtual assets and providing detailed information and documents relating to the project, service providers, investment methods, risk and valuation policies, management experience with virtual assets, custody arrangements, targeted investors, distribution channels, and AML/CTF analysis.
Moreover, IFMs must present their project to the CSSF if they intend to invest in virtual assets. The CSSF places particular emphasis on assessing the involvement of the IFM or any participant in the fund business operations in the safekeeping of virtual assets and the provision of discretionary portfolio management. The CSSF requires an analysis of the activities listed under Article 1 (20c) of the AML/CTF Law to be conducted. If the IFM or any other participant provides virtual asset services, a complete application file for registration as a VASP must be submitted to the CSSF before commencing the activity.
Furthermore, detailed procedures for the registration of a VASP with the CSSF can be found under “Registration of a virtual asset service provider (VASP) – CSSF“.
The present FAQ will be regularly updated in relation to virtual assets, with the aim of providing professionals with concise answers to the main practical issues they are facing.