Historic Moment: MME & daura Created the First Swiss DLT Register Securities on February 1, 00:00:01

Great news for the crypto industry: the first part of the “Federal Act on the Adaptation of Federal Law to Developments in Technology of Distributed Ledgers” has come into force as of February 1, 2021. The new rules have been a collective effort of the federal administration, market players, industry associations, and other participants to optimize the current legal basis for blockchain-based assets.

As of this February, new provisions for registered uncertificated securities (DLT register securities) have been introduced in Swiss law (article 973d ff. of the Swiss Code of Obligations (CO)) which allow tokenization of securities and other rights. The transfer of such DLT register securities is subject to the rules of a registration agreement and possible without any written form requirements.

MME and daura have created the first Swiss DLT register securities on February 1, 2021, at 00:00:01. Since this historic moment, the shares of MME Compliance AG are tokenized and recorded accordingly on the daura infrastructure – the digital share platform for Switzerland. Watch the video of the live event here:

A DLT register security acc. to art. 973d CO is a right that, pursuant to an agreement of the parties, is registered in and can only be transferred via a register of uncertificated securities which fulfills the following requirements:

• it gives creditors, but not the debtor, power of disposal over their rights by means of technical procedures.
• its integrity is protected by appropriate technical and organizational measures, such as joint administration by several independent parties, against unauthorized changes.
• the content of the rights, the functioning of the register and the registration agreement are recorded in the register or in associated supporting data.
• Creditors may inspect the information and register entries relating to them and verify the integrity of the register content without the intervention of third parties.

The debtor must ensure that the register is organized in accordance with its purpose. In particular, it must be ensured that the register functions at all times in accordance with the registration agreement.

Similar to intermediated securities, the debtor under a DLT register security shall be entitled and obliged to pay only to the creditor identified by the register and against appropriate adjustment of the register. In addition, a person who has acquired a DLT register security from the creditor according to the register shall be protected in his acquisition, even if the transferor was not authorized to dispose of it, unless the transferee acted in bad faith or gross negligence in acquiring it.

Furthermore, the new provisions cover specifics regarding the transfer (art. 973f CO), collateralization (art. 973g CO), declaration of invalidity (art. 973h CO) as well as information duties and liability (art. 973i CO).

February 2021

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