What you need to know
- The CSSF published a FAQ on key regulatory considerations for UCIs and control agents in the context of tokenization.
Overview
On 2 October 2026, the CSSF published the first version of its FAQ on tokenization of investment funds, also clarifying some aspects concerning control agents. The CSSF highlights that it takes a technologically neutral approach, which means it looks at how tokenisation is used rather than at the technology itself.
The CSSF strongly encourages entities considering tokenisation to engage in early dialogue. When initiating contact, entities should provide:
- a description of the whole project and full asset lifecycle (issuance, trading, settlement and distribution);
- the legal qualification of the tokens, including the rights attached;
- a description of all stakeholders’ activities in the token's lifecycle;
- details of all contractual relationships, including outsourcing arrangements;
- a preliminary assessment of potential license requirements; and
- identification of any other administrative procedures (e.g. outsourcing notifications) that may need to be completed.
Tokenisation of UCIs
Native tokens: Luxembourg UCIs may issue units or shares natively on DLT, as long as the operating model complies with the regulatory provisions applicable to the UCI. Tokenised shares or units can be in registered or dematerialised form, because using DLT does not determine the legal form of the securities, but only the issuance and record-keeping infrastructure.
- In respect of UCIs issuing registered shares or units, any UCI administrator performing the registrar function may use DLT to maintain the share-/unitholder register.
- In respect of UCIs issuing dematerialised shares or units, the CSSF highlights that an eligible entity will need to act as UCI administrator for the registrar function and, in addition, the requirements of the law of 6 April 2013 on dematerialized securities, as amended (the "Dematerialised Securities Law") have to be complied with.
Control agent versus registrar agent: In case a UCI issues dematerialised shares or units, the appointment of a control agent does not remove the need for a UCI administrator in charge of the registrar function. The CSSF highlights that the tasks of a UCI administrator in respect of the registrar function under Circular CSSF 22/811 go beyond those required from a control agent. However, a single entity holding all the necessary licenses and authorisations may carry out both functions.
Multiple entities as UCI administrators: Where a UCI issues both tokenised (either in registered or in dematerialised form) and traditional shares or units, it may appoint more than one UCI administrators in charge of the registrar function, subject to five conditions:
- the split of tasks must not hinder the exercise of the coordination and supervisory function and must not result in an unnecessary increase of costs;
- the arrangement (operating model as well as any potential risks and implications thereof) must be adequately disclosed to the investors;
- one entity must keep a consolidated view of all shares or units issued;
- any additional risks resulting from such division of responsibilities must be properly managed; and
- full compliance with all applicable regulatory provisions must be ensured, including the requirement to keep a register of registered shares or units of the UCI.
Control Agents
The FAQ also deals with several requirements and aspects to be taken into account when becoming a control agent under the Dematerialised Securities Law, in particular:
- Notification: Firms must notify the CSSF at least two months before starting control agent activity.
- Outsourcing: If any outsourcing or support by ICT third-party arrangements is involved, additional notifications may be needed at least three months in advance, or one month if the provider is a Luxembourg support PFS.
- EEA entities: An entity located in the EEA and wishing to act as control agent must first inform its home regulator, report any objections to the CSSF and make sure the home regulator will cooperate with the CSSF.
- DORA: As the entities listed in the Dematerialised Securities Law are subject to DORA, the CSSF is of the opinion that DORA requirements apply to these entities as a whole – also in respect of their control agent activity. They must therefore have information processing systems (including control and security arrangements for such processing systems) in place which have to be suitable for their control agent activity and apply their DORA compliance framework to their control agent activity.
- Third-party support: Control agents may use third-party technical providers, for example for smart contract development or administration. The CSSF emphasizes that it considers the control agent activity "highly likely" to be a critical or important function within the meaning of DORA. Should therefore a control agent consider to use an ICT third-party arrangement in the context of its control agent activity, such ICT third-party arrangements must be notified in accordance with Circular CSSF 25/882.
Authors: Arnaud Julien, Partner; Marc Hirtz, Counsel; Frank Noesen, Senior Associate; Stella Rante, Associate
