Luxembourg CSSF Allows Limited Crypto Exposure in Retail UCITS and AIFs, February 2026

On 4 February 2026, the Luxembourg Commission de Surveillance du Secteur Financier (CSSF) published Version 7 of its FAQ Crypto-Assets — Undertakings for Collective Investment, updating its supervisory position on crypto-asset exposure by investment funds to align with the entry into force of Regulation (EU) 2023/1114 (MiCAR). This is a final supervisory position, effective immediately upon publication. The updated FAQ follows the European Securities and Markets Authority's (ESMA) 2025 confirmation that limited indirect crypto allocation is compatible with the UCITS Directive when structured through eligible transferable securities.

Under the updated FAQ, UCITS funds may hold indirect crypto-asset exposure of up to 10% of their Net Asset Value (NAV), achieved exclusively through transferable securities that do not embed derivatives, such as exchange-traded products (ETPs) and exchange-traded funds (ETFs) listed on regulated markets. Direct ownership of crypto-assets by UCITS funds remains prohibited. Alternative Investment Funds (AIFs) accessible to retail investors (beyond the well-informed investor category) may hold both direct and indirect crypto-asset exposure, capped at 10% of NAV. Luxembourg-authorised Alternative Investment Fund Managers (AIFMs) whose funds exceed 10% direct or indirect crypto-asset exposure require a license extension from the CSSF for the strategy classification "Other-Other Fund-Crypto-assets".

Fund managers, UCITS management companies, AIFMs, and their depositaries targeting or currently serving retail investors in Luxembourg must review their fund documentation, investment policy disclosures, and prospectuses to reflect the new permissible crypto exposure limits. Any possibility to invest in crypto-assets must be disclosed in the UCITS or AIF prospectus and is subject to ex-ante supervisory scrutiny by the CSSF. Managers must ensure adequate internal control functions to address volatility, liquidity, and technological risks specific to crypto-asset investments. This update marks Luxembourg's first formal alignment with MiCAR for the investment fund sector and may influence supervisory positions in other EU member states.

Indirect crypto-asset investments structured as financial instruments — such as ETPs — are not subject to MiCAR authorization requirements for crypto-asset service providers, even when denominated in crypto-assets. Well-informed investors in AIFs (institutional and professional investors) were already permitted to hold crypto-asset exposure prior to the updated FAQ; the new position extends that authorization to retail-accessible AIFs up to the 10% NAV cap. The 10% NAV limit in UCITS aligns with existing CSSF practice permitting limited investment in non-eligible assets under Article 50(2)(a) of the UCITS Directive (Directive 2009/65/EC).

Source: Commission de Surveillance du Secteur Financier (CSSF), "FAQ Crypto-Assets — Undertakings for Collective Investment," Version 7, 4 February 2026. https://www.cssf.lu/en/Document/faq-crypto-assets-undertakings-for-collective-investment/. MiCAR: Regulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assets. Confirmed March 12, 2026.

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