LUXEMBOURG Trends and Developments Contributed by: Claudia Hoffmann, Daniel Krauspenhaar, Stefanie Samosny and Sascha Wiemann, Luther
created a new listing pathway designed to foster a robust market for long-term investments. EM3S ena - bles the creation of a genuine secondary market for investment funds, allowing investors to exit by trad - ing their positions rather than relying on traditional redemption mechanisms. This eliminates the need for liquidity management tools and provides funds with access to capital while safeguarding confidential investment strategies, thereby preserving their com - petitive edge. By offering true tradeability, EM3S strengthens Lux - embourg’s position as a hub for structured, long-term investment funds. It provides a viable alternative to illiquid or semi-liquid evergreen structures, specifi - cally tailored to professional investors, such as family offices, institutional investors and pension funds. For functional liquidity under EM3S, several prereq - uisites must be in place. Effective collaboration with market makers is essential to ensure fair price forma - tion and transparency. Targeted portfolio disclosure is needed to provide investors with the information required for sound decision-making. In addition, politi - cal recognition of secondary markets as legitimate exit channels is critical to strengthening confidence in the system. Finally, comprehensive investor education on both the mechanisms and the benefits of EM3S is necessary to support informed participation and long- term adoption. In summary, EM3S marks a significant step forwards in enhancing liquidity, transparency and investor confidence in Luxembourg’s long-term investment fund landscape and notably adds further flexibility for investors. Crypto-Assets On 6 February 2025, Luxembourg adopted a new law adapting its national framework to the Markets in Crypto-Assets Regulation (Regulation (EU) 2023/1114; MiCAR) (the “2025 Law”). While MiCAR applies direct - ly across all EU member states, Luxembourg’s law ensures effective enforcement by designating the CSSF as the competent authority. The CSSF is now notably empowered to license crypto-asset service providers and inspect their operations.
Under MiCAR, issuers of crypto-assets must publish a comprehensive White Paper outlining the techni - cal design, governance model and risks associated with each offering. Stablecoin issuers are subject to especially rigorous requirements, including reserve management and operational safeguards, to protect users and ensure financial stability. Meanwhile, ser - vice providers such as custodians and brokers must meet strict standards of conduct, safeguard client assets, and apply anti-money laundering and counter - ing terrorism financing (AML/CTF) checks. Important - ly, operators facilitating transactions from self-hosted wallets – while not directly regulated under MiCAR – are brought within scope by the revised Transfer of Funds Regulation when transfers exceed EUR1,000, thereby triggering mandatory due diligence. To allow a smooth transition, Luxembourg’s existing virtual asset service providers have until July 2026 to migrate fully to the MiCAR regime. In parallel, the 2025 Law also incorporates the Euro - pean Green Bonds Regulation (Regulation (EU) 2023/2631; EuGBR) into Luxembourg’s supervisory framework. The EuGBR establishes a voluntary EU- wide standard for issuers seeking the “European Green Bond” label. As a result, issuers of blockchain-based green instruments can now benefit from a clear frame - work that combines strengthened disclosure stand - ards with independent external review. By aligning the EuGBR with MiCAR, Luxembourg makes it possible for digital assets and tokenised securities to qualify as official European Green Bonds. This ensures that blockchain-issued bonds are not only legally recog - nised but may also carry the EU’s trusted green label, giving investors both strong protections and verified sustainability credentials. In doing so, Luxembourg positions itself at the forefront of digital innovation and sustainable finance, strengthening its role as a leading hub for the future of green investment. Alongside MiCAR, Luxembourg has also advanced work on implementing DAC8, the EU Directive aimed at extending automatic tax information exchange to the field of crypto-assets. On 24 July 2025, the gov - ernment published Draft Law 8592, which lays out the framework for this transposition. Under the pro - posal, crypto-asset service providers and other inter - mediaries will be required to report detailed informa -
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