Significant development: dematerialization of securities
On 1 February 2021, a first part of the DLT Act entered into force, which was unanimously adopted by the Federal Assembly in September last year. The entry into force concerns in particular the partial revision of securities law(Art. 973d et seq. CO), private international law (in particular Art. 145a IPRG) and the Intermediated Securities Act. The second part of the DLT Act with the supervisory provisions is expected to enter into force on 1 August 2021.
The partial revision of the CO introduces the register value right into Swiss law. The register value is a value right that is registered in a register of value rights and can only be transferred via this register of value rights. In contrast to the already known uncertificated security right according to Art. 973c CO (new "simple uncertificated security right"), the register value right effectively has all the functions of a security of public faith (transport, legitimation and traffic protection function).
"Registered securities law effectively has all the functions of a public-sector security (transport, legitimation and market protection function)."
The creation of register value rights requires a registration agreement, which functionally corresponds to a double-sided presentation clause and a double-sided legitimation clause. The registration agreement links a private law right (right of claim, membership, property right) with a register of value rights and thereby subjects the right to the transfer and legitimation order under register value law(Art. 973e f. OR). The deed as an information carrier is substituted by the register of securities; the register is thus the digital equivalent of the deed in classical securities law(Art. 973d para. 2 CO).
If it is intended to digitise rights in the form of register value rights, it is mandatory to comply with the requirements set out in Art. 973d para. 2 CO, because otherwise (despite entry in the register of value rights) no register value right will arise. The parties are therefore well advised to agree on a catch-all in the registration agreement (e.g. contract transfer, which is also valid informally). It is also worth mentioning in this context that the party responsible for the register of uncertificated securities (debtor) is liable for damages in the event that the register does not function in accordance with the general principles of contractual liability(Art. 97 et seq. CO, conceivable liability is also culpa in contrahendo).
Some companies already announced that they created or will create asset tokens based on register value rights. Sygnum Bank AG and Fine Wine Capital AG have tokenised premium wines and SEBA Bank AG intends to create tokenised shares. Wicki Partners has advised on several of these projects.
Further information on the requirements for a register of book-entry securities and the structure of a registration agreement can be found in the Swiss Blockchain Federation's circular "Register Wertrechte". Dr. iur Hans Kuhn of Wicki Partners was a key contributor to this.
Wicki Partners will be very happy to assist you with the digitisation of assets or other legal issues relating to the DLT template. Please contact Dr. iur. Hans Kuhn or Sebastian Wälti directly.