For several years Luxembourg has been one of the more advanced jurisdictions with respect to supporting the issuance of securities on a distributed ledger (DLT). Now the Ministry of Finance has proposed a fourth DLT bill which adds an optional role of a control agent. They would be responsible for the digital securities issuance and keeping track of the amount of the issuance and who owns what. This appears similar to Germany’s concept of a crypto securities registrar.
Luxembourg is one of the world’s largest jurisdictions for fund issuance. In terms of the number of open ended funds issued, IOSCO statistics for 2022 ranked it as first. However, the net asset value is less than a fifth of the United States. Nonetheless, assets under management in 2022 were around €5 trillion ($5.4 trillion) making it the world’s second largest jurisdiction and the largest in Europe.
The jurisdiction has already proven popular for DLT issuances. Three of the European Investment Bank’s four DLT bonds have used Luxembourg law. Hamilton Lane recently created a digitally native class of fund shares, also using Luxembourg law.
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