Friday, March 24

The Luxembourg Stock Exchange admits security ‘tokens’ issued by Société Générale

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The Luxembourg Stock Exchange (LuxSE) admitted this Monday three series of tokens that have been issued by Société Générale. These are the first financial instruments registered using distributed ledger technology (DLT) which can be traded on the Luxembourg trading floor.

Specifically, these tokens son digital IDs (OFM tokens) Y structured products issued and implemented by the digital asset area of ​​Société Générale. Its development has been carried out natively in the blockchains ethereum and tezos public shares, respectively.

These tokens are considered as financial instruments and debt securities subject to French law. Therefore, in accordance with the CAST interoperability and securitization framework.

Financial digitization

The tokens native security rules issued in DLT allow for an issuance process and a fully digital lifecycle, characteristics that according to their promoters “give them the potential to improve efficiency and transparency in financial markets and to make transactions safer and more resilient”.

This admission is part of a broader context marked by the acceleration of the digitization of the market in the use of technology blockchain. In particular, for the imminent adoption of the European Pilot Scheme, which is expected to come into force in 2022 and will allow the processing of tokens through market infrastructures, in accordance with applicable European standards during a transition period.

The CEO of the Luxembourg Stock Exchange, Julie Becker, highlighted in a statement that “the admission of these tokens of security represents a major milestone for financial markets of the European Union by providing a unique, innovative, robust and publicly accessible solution for issuers and investors of these instruments”.

“This is another significant step in the digital transformation of the Luxembourg Stock Exchange, and a first element of our contribution to the determination of prices and the transparency of financial instruments issued in the DLT environment”, he added.

To clarify eligibility criteria and guide issuers of tokens security through the admission process, the Luxembourg Stock Exchange has published this Monday some guidelines for record DLT financial instruments. Thus, the security tokens will have to follow these rules and regulations to be considered for income.