regulation

Luxembourg’s financial watchdog, the CSSF, has made important changes to its rules for valuations of investment funds, the first in two decades. While many things stay the same, some key updates—like lowering limits for money market funds and adding new checks before making investment decisions—are aimed at tightening control and providing clearer guidance.

Crypto assets, as an asset class, have seen soaring valuations and scandals over the years. One Luxembourg AIFM thinks this country’s nascent crypto asset ecosystem is primed for growth from institutional investors when all the puzzle pieces finally fit together.

Luxembourg is leading the way in Europe when it comes to crypto and blockchain technology. With MiCA, a new set of regulations from the European Parliament, Luxembourg’s early bet on cryptocurrency has been validated. We spoke with Nasir Zubairi, CEO of LHoFT - Luxembourg House of Financial Technology, who sees this as an opportunity for cryptocurrencies and crypto assets to enter mainstream markets within EU countries, and heard from banking association ABBL.

Europe’s long-awaited Markets in Crypto-Assets regulation is finally coming up for a vote this coming Thursday at the European Parliament’s meeting in Strasbourg. Players in the crypto industry around the world and in Luxembourg, from cryptocurrency to NFT providers are closely parsing the text that will be voted on. 

A recent European Central Bank study calling for a regulatory framework to address instability in the market for Real Estate Investment Funds, known as Reifs, has been downplayed by a growing number of real estate specialists contacted by Investment Officer in Luxembourg and London. 

It was when the Netherlands, Belgium and Luxembourg signed the customs union that a geographical area at the heart of Europe was defined. The aim was to promote economic integration and cooperation between the three member states. 

Since then, Benelux has been one of the most successful regional integration models, both in terms of economic growth and political stability. This success is also rooted in the creation of a solid legal framework that provides a stable and transparent business environment.

Luxembourg’s fund industry has high hopes for Eltif 2.0, the revised European regime for long-term investment funds that is set to be approved next month by the European Parliament. Thanks to the updated rules, products like private funds can be targeted directly at retail investors in all 30 countries in the European Economic Area with one single AIFM passport.

For a second time in two years, investment fund managers have been ordered to directly report significant redemptions as the CSSF, the Grand Duchy’s financial supervisor, stepped up its monitoring of the impact from the war in Ukraine and the international sanctions against Russia.

With the Chinese government cracking down, foreign investors are reassessing their exposure to China. It is a balancing act between capitalising on the lucrative opportunities the country offers and protecting portfolios against the apparent arbitrariness of the government. The attentive investor can nevertheless hold on to a common thread.

The moment the government starts determining what you are allowed to earn as an investor, it is usually wise to be gone. In Europe, there is more regulation than in the United States. In some cases, such as in the financial sector, there has been de facto nationalisation since the Great Financial Crisis. The average bank employee has to deal with more rules than the average civil servant.