ELTIF 2.0 implemented in Luxembourg

Further to the adoption of draft law N°8387 (the Bill) on 6 February 2025 on the requirements relating to the investment policies and operating conditions of the European long-term investment funds and the definition of eligible assets for investment, the requirements regarding portfolio composition and diversification and the borrowing of liquid assets, and other provisions implementing the recent amendments to Regulation (EU) 2015/760 of the European Parliament and of the Council of 29 April 2015 on European long-term investment funds (ELTIF Regulation) have now been fully implemented to the Luxembourg legal framework. The Bill came into effect on 10 February 2025 (except with respect to certain provisions not related to the ELTIF Regulation).

What are the regulatory changes?

• The Bill amends Article 8(1) of the Luxembourg law dated 16 July 2019 on the operationalisation of European regulations in the field of financial services, as amended from time to time. Article 8(1) the Luxembourg law dated 16 July 2019 lists the administrative sanctions that the Commission de Surveillance du Secteur Financier (CSSF) may impose on ELTIFs in case of non-compliance with the ELTIF Regulation.
• The Bill only implements the ELTIF Regulation in the Luxembourg framework and does not make any changes or additions to the ELTIF Regulation.

What is the purpose of the regulatory changes?

The purpose of the amendments is to update the direct references that the Luxembourg law dated 16 July 2019 makes to the ELTIF Regulation as amended by Regulation (EU) 2023/606. Since the ELTIF Regulation is directly applicable in the national legal order, Luxembourg laws are limited to designating CSSF to oversee the application of the ELTIF Regulation. The Bill only aims to ensure the administrative powers of the CSSF relate to the updated provisions of the ELTIF Regulation.

What is ELTIF 2.0?

• ELTIF 2.0 refers to Regulation (EU) 2023/606 of the European Parliament and of the Council of 15 March 2023 amending Regulation (EU) 2015/760 as regards the requirements relating to the investment policies and operating conditions of European long-term investment funds and the definition of assets eligible for investment, the requirements relating to portfolio composition and diversification and the borrowing of liquid assets and other provisions of the fund statutes (ELTIF 2.0 Regulation) that came into effect on 10 January 2024 as part of the Capital Markets Union package.
• The general purpose of ELTIF 2.0 Regulation was to enhance the ELTIF framework to make it more attractive and accessible to market participants.
• After the ELTIF 2.0 Regulation came into force, the European Commission published Regulatory Technical Standards (RTS) in October 2024, further specifying regulations relating to ELTIFs.
• Some of the most important changes in ELTIF 2.0 are: (i) enhancing the retailisation (ie wider distribution to retail investors by removing constraints in terms of min. ticket for example) ; (ii) allowing for a broader range of eligible assets (notably to allow implementation of funds of funds or RE investment strategies) and (iii) increasing flexibility for investment and marketing activities across the EU ; while ensuring implementation of appropriate liquidity management tools.

How Can DLA Piper Assist?

Our team can help with any regulatory matters related to ELTIFs and answer any questions you have.

Feel free to reach out to any of the DLA Piper contacts listed below for further information.

To learn more, see our earlier publications on ELTIF 2.0 here.