DLT Securities (Registerwertrechte): Switzerland's Tokenised Securities Framework
Definition
DLT securities (German: Registerwertrechte — literally “register-based rights”) are a category of security under Swiss law, created by the Federal Act on the Adaptation of Federal Law to Developments in Distributed Ledger Technology (the DLT Act, effective February 1, 2021).
A DLT security is defined in the Swiss Code of Obligations (Article 973d et seq.) as a security right that:
- Is registered in a distributed electronic register (blockchain or other DLT)
- Provides all participants with access to the registered information
- Is protected against modification through technical means (cryptographic security)
DLT securities have the same legal character as traditional securities — they can represent equity (shares), debt (bonds), or fund interests — but exist exclusively as entries in a distributed register. There is no paper certificate, no central securities depository (CSD) entry, and no custodian maintaining a separate register. The blockchain record is the legal instrument.
Legal Rights
A holder of a DLT security has the same legal rights as a holder of the equivalent traditional security:
Equity DLT securities: Shareholder rights — voting rights, dividend rights, pre-emption rights — are exercisable by the registered token holder on the DLT register.
Debt DLT securities: Bondholder rights — coupon payment rights, redemption rights, covenant rights — accrue to the registered token holder.
Fund DLT securities: Fund unit rights — NAV redemption rights, distribution rights, voting rights in fund governance — are held by the registered token holder.
Transfer
Transfer of a DLT security is effected by updating the DLT register — typically through a blockchain transaction that transfers the token from one wallet address to another. Under Article 973e of the Swiss Code of Obligations, this transfer has full legal effect: the transferee acquires legal title to the security upon completion of the DLT register update.
No paper endorsement, CSD instruction, or notarial act is required. The blockchain transaction IS the legal transfer.
Pledge (Collateral)
DLT securities can be pledged as collateral by an entry in the distributed register (Article 973f). This enables:
- Bitcoin-backed lending (using wrapped or tokenised Bitcoin as DLT securities)
- Repo transactions using DLT bond securities
- Margin financing against DLT equity securities
Sygnum Bank’s landmark $50 million Bitcoin-backed syndicated loan (August 2024) was structured around the ability to use digital assets as collateral within FINMA’s regulatory framework, building on the DLT Act’s pledge provisions.
Issuance Requirements
To issue DLT securities, a distributed register must meet the following technical requirements under Swiss law:
Integrity: The register must be protected against unauthorised modification through cryptographic means.
Participant control: Registered participants must be able to control the exercise of their rights — no single party can prevent a participant from transferring or exercising their rights.
Access: The register operator must be able to provide participants access to their own data.
Continuity: The register must be designed to remain operable even if individual nodes fail (distributed fault tolerance).
Public blockchains (Ethereum, Polkadot) and permissioned blockchains (private Ethereum networks, Hyperledger Fabric configurations) that meet these requirements can host DLT securities.
Institutions Issuing DLT Securities in Switzerland
Sygnum Bank: FINMA-licensed bank and the most active DLT securities issuer in Switzerland. Sygnum issues DLT securities for clients including private equity issuers, bond issuers, and fund managers.
AMINA Bank: FINMA-licensed bank issuing DLT securities across Swiss, Hong Kong, and Abu Dhabi regulatory frameworks.
SIX Digital Exchange (SDX): Holds a DLT trading facility licence from FINMA. Issues and provides secondary trading for DLT securities. Has listed tokenised bonds from UBS, Julius Baer, SIX Group, and other Swiss issuers.
Swiss National Bank (experimental): The SNB’s Project Helvetia experimented with wholesale CBDC settlement for DLT securities — using digital Swiss francs to settle DLT bond transactions on SDX.
Insolvency Protection
Under the Swiss Debt Enforcement and Bankruptcy Act (as amended by the DLT Act), DLT securities held in custody for clients are segregated from the custodian’s insolvency estate. This means:
- If Sygnum or AMINA becomes insolvent, client DLT securities are not available to the bank’s general creditors
- Clients can reclaim their DLT securities from the insolvency administrator
- Client assets are treated as belonging to the client, not the custodian
This statutory protection is one of the strongest client safeguards for tokenised assets in any jurisdiction and has been a significant factor in institutional clients’ choice of Swiss custody for DLT securities.
Comparison to Traditional Securities
| Feature | Traditional Security | DLT Security |
|---|---|---|
| Existence | Paper or CSD book entry | Blockchain entry |
| Settlement | T+2 (typical) | T+0 or T+1 |
| Custodian | Required | Optional (self-custody possible) |
| Transfer mechanism | CSD instruction | Blockchain transaction |
| Insolvency protection | Statutory (Switzerland) | Statutory (Switzerland, DLT Act) |
| Secondary market | Traditional exchange / OTC | SDX or OTC |
| Minimum denomination | Issuer-defined (often high) | Can be fractional |