Democratising access: ELTIF 2.0 via UCI Part II
ELTIF 2.0 turns the EU’s long-term investing label into a practical retail option. The amended regulation widens eligible assets, including fund of funds and a clearer definition of real assets, recalibrated portfolio limits and lifting borrowing up to 100% for professional-only ELTIFs – making diversified portfolios workable in a format open to non-professional investors.
A regulated wrapper that aligns with retail: UCI Part II
A UCI Part II fund is a CSSF authorised AIF that can invest in all asset types, is marketable to all investor categories (including retail), and if managed by an EU-authorised AIFM benefits from the AIFMD passport to professionals. Authorising a Part II compartment as an ELTIF adds the EEA-wide retail passport, and Part II umbrellas can operate ELTIF and non-ELTIF compartments side-by-side under one governance framework.
Clear, codified authorisation path
The CSSF provides a dedicated ELTIF application questionnaire that sets out required disclosures and annexes; it has been updated to reflect ELTIF 2.0/RTS to streamline approvals. In parallel, the e-Identification regime replaces the legacy visa-stamping for UCITS/Part II UCI/SIF/SICAR prospectus cutting frictions for document updates.
Money Market Funds: institutional scale today, tokenised rails tomorrow
Luxembourg combines the EU’s Money Market Funds Regulation (MMFR) with clear local guidance and a financial centre built for cross-border distribution. Crucially, the legal and supervisory framework now also supports live, on-chain operating models for MMF share classes, allowing managers to modernise primary processes without comprising on regulatory certainty.
“Franklin Templeton chose Luxembourg as the domicile to launch our tokenised money market fund in Europe for several reasons. First, we had extremely positive interactions with different market participants and the various authorities in the willingness to support us in getting this project from design to execution in a timely manner; secondly due to the stable political and business environment within the country and the thriving digital ecosystem that we see emerging within this leading fund centre.”
Craig Blair CEO – Franklin Templeton Luxembourg
MMFR applied with Luxembourg specificity
The CSSF maintains a dedicated MMFR FAQ that interprets the EU rulebook for funds domiciled in Luxembourg. This covers classification, liquidity tools, disclosures and stress testing, giving boards and other functions a predictable supervisory base.
A supportive legal framework for DLT securities
Luxembourg explicitly recognises issuance and holding of dematerialised securities on distributed ledgers and expanded options again with “Blockchain Law IV”, thereby reducing legal uncertainty around tokenised fund shares and transfers.
Tokenisation with real precedents
Franklin Templeton received CSSF approval for the first fully tokenised UCITS domiciled in Luxembourg in 2024, using a blockchain-enabled transfer agency platform. This demonstrated that tokenised share issuance and registrar functions can sit within a mainstream fund wrapper. Building on this, in May 2025, BNP Paribas Asset Management launched natively tokenised MMF shares on Allfunds Blockchain, with the cross-border flow between Luxembourg and France executed via Distributed Ledger Technology. Together, these examples show that Luxembourg is already moving from legal readiness to live implementation in tokenised fund structures.
Dedicated Funds
Dedicated funds, be it single-investor sleeves, family-office mandates or institution-specific strategies, work best when the domicile pairs precise structuring control with fast execution and predictable supervision. Luxembourg does exactly that. Sponsors can launch a ring-fenced compartment under an existing umbrella or create a new vehicle, choose between structures subject to direct CSSF supervision or manager-supervised products, and plug straight into EU marketing route, in an operating ecosystem built for complex, cross-border fund ranges.
“Dedicated funds are a cornerstone of Luxembourg’s financial ecosystem, driving both innovation and transparency. At UBS, we recognize their role in shaping a resilient and forward-looking marketplace. By building on Luxembourg’s expertise and robust regulatory environment, dedicated funds empower us to deliver tailored solutions that meet the evolving needs of our clients in the world of asset management.”
Francesca Gigli Prym CEO – UBS Asset Management (Europe) S.A.
Dedicated Fund Vehicles
Part II UCI
CSSF regulated AIF, sellable to all investor types. With an EU AIFM, AIFMD passport to professionals – retail optionality where needed.
SIF
CSSF regulated AIF for well-informed investors.
RAIF
No product level supervision, AIFM is supervised by CSSF. EEU marketing to well-informed investors via AIFMD.
Speed to market without sacrificing the AIFMD chassis
The RAIF allows immediate launch once documents and an authorised EU AIFM are in place, no prior CSSF product approval, while still sitting fully inside the AIFMD framework for risk, valuation, reporting, and depositary. This combination is the core execution advantage for mandate-driven products.
Compartment architecture with statutory ring-fencing
Luxembourg umbrellas (RAIF/SIF/Part II) can host multiple ring-fenced compartments, each with its own strategy, fee grid and investor base. This is ideal for “one-client” compartments alongside flagship products under a single governance point.
Marketing options from the same platform
With an EU-authorised AIFM, RAIFs and SIFs can be passported to well-informed investors across the EU under AIFMD. Where retail access is required for a dedicated sleeve, a Part II compartment and, if appropriate, an ELTIF keeps the umbrella in one place while tailoring distribution to the mandate’s audience.
Private assets depository options
Luxembourg accommodates the Professional Depositary of Assets other than Financial Instruments (PDAOFI), which is a lighter, AIFMD-compatible depositary model for closed-ended AIFs whose assets are largely non-custodiable (PE/RE/PD). That keeps dedicated private-markets mandates compliant without forcing a public-markets depositary model.
