A tokenized fund is still a regulated fund: a UCITS, an AIF managed under the AIFMD, an ELTIF or, in Spain, an investment fund under Law 35/2003 or a venture capital fund under Law 22/2014. Tokenization changes how its units are recorded, transferred and distributed, not the rules that govern the fund. ESMA put it this way in its June 2025 report on the pilot regime: distributed ledger technology (DLT) does not change the risk, cost or complexity of the investment product. This guide explains which rule governs each piece in the EU: how units are recorded, the DLT Pilot Regime (Regulation (EU) 2022/858), ELTIF 2.0 and the position of Spain's CNMV, with the cases we could confirm in official sources.
What a tokenized fund is, and what does not change
Units in a collective investment undertaking are financial instruments (Annex I, Section C, point 3, of MiFID II, Directive 2014/65/EU). Since Regulation (EU) 2022/858, the definition of financial instrument in Article 4(1)(15) of MiFID II expressly includes instruments issued by means of distributed ledger technology (Article 18 of that regulation). That is why MiCA does not apply to a tokenized fund unit: Article 2(4)(a) of Regulation (EU) 2023/1114 excludes from its scope crypto-assets that qualify as financial instruments. We explain the boundary between the two regimes in MiCA vs MiFID II.
What changes is the infrastructure. The unitholder register moves to a DLT network, subscriptions and redemptions can run on smart contracts, and distribution can rely on whitelisted wallets. The authorization, the manager, the depositary and the marketing rules remain those of the fund type:
| Fund type | Rule | What tokenization does not change |
|---|---|---|
| UCITS | Directive 2009/65/EC | No UCITS may pursue its activities as such without authorization (Article 5) |
| AIF | Directive 2011/61/EU (AIFMD) | Any collective investment undertaking that raises capital from a number of investors to invest it under a defined investment policy and does not require UCITS authorization is an AIF (Article 4(1)(a)) |
| ELTIF (FILPE in Spain) | Regulation (EU) 2015/760, as amended by Regulation (EU) 2023/606 | Only EU AIFs can be authorized as ELTIFs (Article 3(2)) |
| Money market fund | Regulation (EU) 2017/1131 | It cannot be established, marketed or managed in the EU as an MMF without MMF authorization (Article 4(1)) |
| Spanish investment fund (FI) | Law 35/2003 | Units are financial instruments; since 2023 they can be represented on DLT (Article 7(1)) |
| Spanish venture capital fund (FCR) | Law 22/2014 | Units are transferable securities (Article 31(4)) |
How fund units are recorded on DLT
There are two layers. The first is the law of the fund's home state: it decides whether units can be represented on DLT and who keeps the register. The second is the EU pilot regime, which only applies if the units are traded or settled on a DLT market infrastructure.
Spain. Law 6/2023 recognizes three ways to represent transferable securities: book entries, certificates and systems based on distributed ledger technology. The chosen form applies to the whole issue (Article 6(1)). If the securities are admitted to trading on a trading venue, they must be represented by book entries or by DLT within the framework of Regulation (EU) 2022/858 (Article 6(2)). The system must ensure the integrity and immutability of the issue and identify the holders (Article 6(5)). In the issue document, the issuer appoints one or more entities responsible for administering the recording and registry of the securities (known in Spain as ERIR), which must be authorized for the activity in Article 126(a) of the same law (Article 8(4)). For funds, the fourth final provision of Law 6/2023 amended Law 35/2003: units of a Spanish investment fund (FI) and shares of a SICAV can be represented on DLT (Articles 7(1) and 9(3)), effective April 7, 2023.
Luxembourg. On October 2, 2026, the CSSF published FAQs on fund tokenization (version 1). They are supervisory guidance, not law. According to the CSSF, a Luxembourg undertaking for collective investment can issue native units on DLT, in registered or dematerialized form, provided the operating model complies with the framework that applies to the fund (question 1). Appointing a control agent under the dematerialized securities law does not remove the need for a fund administrator performing the registrar function (question 2). And a single fund can combine tokenized and traditional units with several registrar administrators, as long as one entity keeps a consolidated view of all units and the offering documents name each administrator and its role (question 3).
What the DLT Pilot Regime allows
Regulation (EU) 2022/858 has applied since March 23, 2023 (Article 19). It creates three types of DLT market infrastructure: the multilateral trading facility (DLT MTF), the settlement system (DLT SS) and a system that combines both (DLT TSS) (Article 2, points 5, 6, 7 and 10). We cover them in detail in what a DLT market is and how it affects token issuers.
For a fund, the key limit is in Article 3(1). The only fund units eligible are those of collective investment undertakings covered by Article 25(4)(a)(iv) of MiFID II, meaning non-structured UCITS, whose assets under management have a market value below EUR 500 million (point (c)). AIF units, and therefore ELTIF units, are not on that list. ESMA confirms this in its Article 14 report (June 2025): pilot regime infrastructures cannot trade or settle AIFs. In addition, the aggregate market value of the instruments on each infrastructure cannot exceed EUR 6 billion (Article 3(2)), and at EUR 9 billion the operator must activate its transition strategy (Article 3(3)).
ESMA's January 2026 list includes six authorized infrastructures: CSD Prague (DLT SS, Czech Republic), 21X (DLT TSS, Germany), 360X (DLT MTF, Germany), Axiology (DLT TSS, Lithuania), LISE (DLT TSS, France) and Securitize Europe (DLT TSS, Spain, authorized by the CNMV on November 26, 2025). According to ESMA's report, in June 2025 the CSD Prague system supported UCITS among other instruments, and 360X planned to admit them.
The reform proposal: COM(2025) 943
On December 4, 2025, the European Commission proposed amending the pilot regime as part of a package on capital market integration and supervision (COM(2025) 943, procedure 2025/0383(COD)). It is a proposal, not law in force. According to its text, Article 3(1) and its product-specific limits would be deleted; the aggregate cap would rise to EUR 100 billion; and a simplified regime for smaller infrastructures would be created, capped at EUR 10 billion. As of October 13, 2026, the European Parliament's Legislative Observatory lists it as awaiting committee decision, with a draft report dated June 11, 2026.
ELTIF 2.0: what Regulation (EU) 2023/606 changed
The ELTIF (European long-term investment fund; FILPE in the Spanish version of the rules) was created by Regulation (EU) 2015/760, which has applied since December 9, 2015 (Article 38). Regulation (EU) 2023/606 amended it and has applied since January 10, 2024 (Article 2). This is what the market calls "ELTIF 2.0." The main changes:
- Portfolio: the minimum share in eligible investment assets falls to 55% of capital (Article 13(1); previously 70%).
- Qualifying portfolio undertakings: if listed, their market capitalization can reach EUR 1.5 billion at the time of the initial investment (Article 11(1)(b); previously EUR 500 million, according to recital 17).
- Real assets: the EUR 10 million minimum value per real asset is removed (recital 14).
- Retail investors: the EUR 10,000 minimum initial investment and the 10% portfolio cap that applied to investors with portfolios of up to EUR 500,000 are removed (recital 47).
- Exit: the conditions for redemptions during the fund's life, already possible under the 2015 rules, are revised (Article 18(2)), and the fund rules may allow matching of exiting and incoming investors' requests (Article 19(2a)).
Retail access still comes with safeguards. A suitability assessment under Article 25(2) of MiFID II is required, including for purchases on the secondary market (Article 30(1)). The distributor, or the manager when selling directly, must issue a written alert if the fund's life exceeds 10 years (Article 30(2)). Retail investors can cancel their subscription without penalty during the subscription period and for two weeks after signing (Article 30(7)). And borrowing is capped at 50% of net asset value if the fund is marketed to retail investors (Article 16(1)(a)). ELTIFs authorized before January 10, 2024 are deemed compliant until January 11, 2029, or indefinitely if they do not raise additional capital (Article 2 of Regulation 2023/606). The full definition is in our ELTIF glossary entry.
ELTIFs and tokenization. An ELTIF's rules cannot prevent its units from being admitted to trading on a regulated market or a multilateral trading facility (Article 19(1) of Regulation 2015/760). But today an ELTIF cannot be traded or settled on a pilot regime infrastructure, because it is an AIF (Article 3(1) of Regulation 2022/858). If proposal COM(2025) 943 were adopted as drafted, that obstacle would disappear. On documentation, an ELTIF needs a prospectus to be marketed in the EU and, if offered to retail investors, a key information document under the PRIIPs Regulation (Article 23(1)). The Prospectus Regulation (EU) 2017/1129 excludes units of open-end collective investment undertakings, but not closed-end ones (Article 1(2)(a)). That regulation has been amended by the Listing Act, which we summarize in the Listing Act and tokenization.
Tokenized money market funds
A tokenized money market fund still needs authorization under Regulation (EU) 2017/1131: no collective investment undertaking may be established, marketed or managed in the EU as an MMF without it (Article 4(1)). It can be a UCITS or an AIF (Article 1(1)(a)). Under the pilot regime, an MMF set up as a non-structured UCITS falls within Article 3(1)(c) of Regulation 2022/858 if its assets under management are below EUR 500 million. If it is set up as an AIF, it does not.
What Spain's CNMV requires from a fund with units on DLT
The CNMV's published position is in its Q&A on DLT-based financial instruments, dated March 20, 2025. It is not law but the supervisor's interpretation. The points that affect a fund:
- One form per class. The form of representation applies to the whole issue and, for funds, to each unit class (question 8; Article 6(1) of Law 6/2023).
- Authorized ERIR. If the units are not traded on a DLT infrastructure, the ERIR must be authorized for the ancillary service of safekeeping securities under Article 126(a) of Law 6/2023. If they are traded on a pilot regime infrastructure, those duties fall on the infrastructure that settles them (question 12; Article 8(5)).
- Official register. The CNMV keeps an official register of the ERIR for each issue (Article 2(b) of Royal Decree 815/2023; question 13).
- Contingency plan. The ERIR must have a plan to keep the register running if the network fails or stops being viable, including moving to another network (Article 5(2) of Royal Decree 814/2023; questions 11 and 26).
- Controlled smart contract. The issuance contract usually restricts transfers, for example with a whitelist of addresses, and must allow the ERIR to restore the securities to their holder if keys are lost or stolen (questions 25 and 27).
Venture capital funds come with a caveat. Law 22/2014 states that FCR units are transferable securities that can be represented by registered certificates or book entries (Article 31(4)). It does not mention DLT, unlike Law 35/2003 after its amendment. Law 6/2023 allows DLT for transferable securities in general (Article 6(1)), but it is worth confirming the fit with the CNMV before designing a tokenized FCR. In Spain, the name FILPE is reserved for funds set up under Regulation 2015/760 and entered in the CNMV register (Article 40 bis of Law 22/2014). The steps for a Spanish investment fund, with the management company, the depositary and the ERIR, are in the Spanish case: how to tokenize an investment fund in Spain.
Verified cases in the EU
We only include cases confirmed in a supervisor's register or document, or in the management company's own communication.
| Case | What it is | Status | Source |
|---|---|---|---|
| RENTA 4 ATLAS, FI (ISIN ES0135215004), Spain | A fund created for a test in the CNMV sandbox. Its units were tokenized on Allfunds Blockchain's private, permissioned network, with a CNMV supervisory node. Cash was settled in traditional systems | Test completed; the CNMV published the fund's dissolution on March 10, 2022 | CNMV findings document (September 2022) |
| AZVALOR BLOCKCHAIN, FI, Spain | A harmonized (UCITS) fund entered in the CNMV register under No. 5982 on October 3, 2025. Its management company presents it as its tokenized fund, launched in the CNMV sandbox (the CNMV's published table of sandbox projects does not list it), with units recorded on a private blockchain network using Allfunds Blockchain infrastructure, and BNP Paribas (Securities Services) as depositary and administrator | According to the management company, in an initial phase and not open to general distribution | CNMV register; Azvalor's letter to investors for the second half of 2025 and the note it links to |
| Allfunds Bank, Spain | A DLT-based multilateral trading facility for UCITS units | "In tests" in the fourth cohort of the CNMV sandbox | CNMV financial innovation page |
| Securitize Europe DLT TSS, Spain | A pilot regime infrastructure that trades and settles DLT financial instruments | Authorized by the CNMV on November 26, 2025 | ESMA list (January 2026) |
In its findings on the Renta 4 test, the CNMV suggested considering an amendment to Law 35/2003 to expressly cover DLT representation; Law 6/2023 later added it. We do not list other European tokenized funds because we could not confirm them in a prospectus, a register or a supervisor's document.
Frequently asked questions
Does a tokenized fund need a MiCA license?
No. Its units are financial instruments, and MiCA does not apply to crypto-assets that qualify as such (Article 2(4)(a) of Regulation (EU) 2023/1114). The fund's own rules and MiFID II apply. The crypto-asset service provider (CASP) license is for other kinds of assets; we explain it in MiCA license by country.
Can an ELTIF be traded on a DLT Pilot Regime infrastructure?
Not today. Article 3(1) of Regulation (EU) 2022/858 only allows units of non-structured UCITS with less than EUR 500 million in assets under management, and an ELTIF is an AIF. Proposal COM(2025) 943 would remove that limit, but it is still going through the legislative process.
Can a fund have tokenized and traditional units at the same time?
In Luxembourg, the CSSF allows it with several registrar administrators, as long as one entity keeps a consolidated view and the offering documents explain the setup (FAQs of October 2, 2026, question 3). In Spain, the CNMV requires each unit class to use a single form of representation (question 8 of its DLT Q&A).
Who safekeeps tokenized fund units in Spain?
The ERIR keeps the register and must be authorized to safekeep securities, unless the units are traded on a pilot regime infrastructure, which takes over those duties (Article 8 of Law 6/2023). Keys can be held by the holder or by a third party, and losing them must not mean losing the units: the ERIR must be able to restore them (CNMV, question 27).
What does ELTIF 2.0 change for retail investors?
The EUR 10,000 minimum investment and the 10% portfolio cap are gone (recital 47 of Regulation (EU) 2023/606). The suitability assessment and the right to cancel the subscription without penalty for two weeks remain (Article 30 of Regulation (EU) 2015/760).
How we work at Unknown Gravity
At Unknown Gravity we build the technology behind a tokenized fund: the subscription and redemption platform, smart contracts with whitelists and restoration functions, and the integration with the management company, the depositary and the ERIR or DLT infrastructure. We are not a management company, depositary, ERIR or law firm: we work alongside the authorized entities and the project's legal counsel. For ERIRs, we offer a token registry and control platform.
Official sources
- Regulation (EU) 2022/858, DLT Pilot Regime (EUR-Lex)
- Regulation (EU) 2015/760 on ELTIFs, consolidated text after Regulation (EU) 2023/606 (EUR-Lex)
- European Commission proposal COM(2025) 943 (EUR-Lex)
- Spain: Law 6/2023 on Securities Markets and Investment Services (BOE)
- CNMV: Q&A on DLT-based financial instruments (March 20, 2025)
- ESMA: report on the functioning of the DLT Pilot Regime (June 25, 2025)
- ESMA: authorized DLT market infrastructures (January 2026)
- CSSF: FAQ on fund tokenization (October 2, 2026)
Framework verified as of October 13, 2026. This content is for information only and is not legal or investment advice. Considering tokenizing a fund in Europe? Talk to us.