08 March 2019

Digitize Your Swiss Shares!

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With the blockchain-based "daura" platform, Swiss SMEs can now keep their share register simply and digitally and conduct capital procurement transactions at the push of a button.

MME and Swisscom jointly have developed the blockchain-based ""daura"" platform. Thanks to daura, Swiss SMEs can now manage their shareholder register simply and digitally – and carry out capital increases at the push of a button. Eight companies have already agreed to keep their shareholder register on the platform. The first capital increases are in preparation.

From a Bet to a Digital Share

In 2017, MME and Swisscom, as part of digitalswitzerland, bet that Swiss equity shares could be digitized using a blockchain solution compliant with Swiss law. Daura AG was founded in 2018, and the first prototype was presented in that same year.

In February 2019, the daura platform had its “go-live”: Swiss companies limited by shares can now keep their shareholder register digitally and fully automatically, as well as issue new digital shares and participation certificates by means of capital increases. The processing of capital procurement transactions hence is simplified and, most importantly, non-listed companies gain access to a wide range of investors via the daura platform. Investors, in turn, will benefit from a simple peer-to-peer transfer of shares and participation certificates among registered users via the platform.

The solution is compliant with Swiss law, and the application runs on a private blockchain operated in Switzerland.

The MME team of experts has worked intensively with Swisscom on the legal and technical implementation of the betting procedure. The legal challenges particularly focused on linking and synchronizing legally relevant information with DLT transaction data (DLT = Decentralized Ledger Technology) and on the legally valid transfer of uncertificated securities in a DLT-based application. Dematerialized digital shares (or ""C-shares"") are transferred informally via the platform between registered daura users by means of a tripartite transfer agreement, represented by cryptographic tokens and irreversibly stored on the DLT. By approving a contractual framework and a concrete contractual transaction agreement of the parties involved in each transaction, it is ensured that the corresponding shareholder right is transferred synchronously with a token booking on the DLT and that the acquiring token holder is entered in the shareholder register as a new shareholder. For later project phases, it is also planned to implement technical solutions for the automated processing of dividend payments and for the voting at general meetings, directly via smart contract. From mid-March, the module will be activated for capital increases, and in further expansion steps, daura shall be connected to marketplaces or exchange platforms.

 

First Customers

At the launch of the platform, eight SMEs, including FinTech company Sygnum and tourism company Weisse Arena Group (WAG), have already agreed to digitize their shares via daura's blockchain-based solution and to use them for employee stock ownership programs, share transfers to investors or capital increases. MME will be the first legal consulting company in Switzerland to digitally keep the shareholder register of its operating company MME Compliance AG on a blockchain.

According to daura CEO Peter Schnürer, the great advantage lies in the newly-gained efficiency: ""daura reduces administration and transaction costs and strengthens Switzerland as a location for innovation through easy access to the capital market for thousands of SMEs"".

In order to get fast and easy access to Swiss SMEs, daura is working in a strategic partnership with BDO, one of the leading auditing, fiduciary and consulting firms in Switzerland. BDO will advise its 22,000 SME clients on the advantages of a blockchain-based shareholder register and offer complementary services to the digital share.

Daura had already entered into a partnership with Sygnum in autumn 2018. The Swiss-Singaporean company, which is supported by former National Bank President Philipp Hildebrand and many others, is currently in the regulatory process to obtain a Swiss banking license.

Interested? Start digitizing your share register today at www.daura.ch!

MME Integrated Approach

The procedure for registering your Swiss company limited by shares on the platform is simple. All you need to do is upload various company documents and fill in personal data in the user interface.

However, you first must ensure that your articles of association allow your shares or participation certificates to be tokenized. We are happy to carry out such ""readiness check"" of your articles of association free of charge. In case you are not yet ""daura-ready"", we will be happy to support you in making the appropriate adjustments.

In addition, MME can provide you with tailor-made advice, support and solutions for all corporate law procedures and change processes. Our range of services includes:

  • Incorporations
  • Capital increases
  • Amendments to the articles of association
  • Shareholders' agreements
  • Issue prospectus
  • Declaration of duties and taxes
  • Calculation of tax values for net wealth tax purposes
  • Employee participation plans

The daura team at MME is looking forward to meeting with you!