CSSF updates its FAQ on virtual assets

On 4 January 2022, the Luxembourg Commission de surveillance du secteur financier (the CSSF) updated its FAQ on Virtual Assets for UCIs. The CSSF clarified that an AIF marketed to professional investors may (under conditions) invest in virtual assets also if it is managed by a non-authorised AIFM. Moreover, the CSSF stated the conditions under which a Luxembourg depositary may be appointed to act as a depositary for investment funds investing directly in virtual assets.

A depositary that wishes to directly safeguard virtual assets must inform the CSSF of such plans beforehand, in a timely manner. It must also put in place adequate organisational arrangements, as well as an appropriate operational model, considering the specific risks related to safekeeping of virtual assets. These requirements are additional to the registration as a virtual asset service provider.

A depositary that directly safeguards virtual assets (and provides a custodian wallet service) has an obligation of restitution for the loss or theft of such virtual assets. This is not the case when a depositary does not offer safekeeping or administration type of services for the virtual assets, and the investment fund (or its manager) directly appoints a specialised virtual asset service provider that offers a custodian wallet service. In that case, the depositary’s safekeeping duties consist of ownership verification and record keeping, and the liability for restitution of the virtual assets in case of loss or theft rests directly on the virtual asset service provider with whom the investment fund (or its manager) is required to have a direct contractual relationship.

For further information, please don’t hesitate to reach out to our asset management & investment funds team in Luxembourg.

Source: FAQ_Virtual_Assets_UCI