Luxembourg Loosens Rules for Semi-Transparent ETFs

Luxembourg’s financial regulator has eased disclosure rules for semi-transparent exchange-traded funds, aligning its approach with that of the Central Bank of Ireland. The Commission de Surveillance du Secteur Financier now requires ETF issuers to publish full portfolio holdings at least quarterly with a delay of up to 30 days, instead of monthly reporting. This change is designed to make semi-transparent ETFs more appealing to active fund managers who want to protect proprietary trading strategies while still ensuring market liquidity. 

Under the new guidance, authorised participants and market makers will receive up-to-date portfolio information to maintain efficient ETF trading, but must adhere to strict confidentiality agreements. This brings Luxembourg’s rules in line with Ireland’s recently updated regime, and reflects growing competition among European fund jurisdictions to attract innovative ETF products. 

The relaxed transparency requirements address concerns from active managers about front-running — where publicly disclosed holdings could be used against a fund’s strategy. By limiting disclosure frequency and securing sensitive data with confidentiality clauses, Luxembourg aims to balance investor protection with competitive fund innovation. 

Luxembourg was an early adopter of semi-transparent ETF structures and is considered a leading hub for cross-border investment funds in Europe. The regulator’s latest move could encourage more asset managers to domicile creative ETF strategies in the country rather than elsewhere.

This regulatory change not only strengthens Luxembourg’s position in the European ETF market but also highlights continued efforts by European financial centres to adapt to investor needs and global trends. 

Read more: etfstream.com/articles/luxembourg-regulator-relaxes-semi-transparent-etf-rules-in-line-with-cbi

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