Luxembourg adopts law introducing Distributed Ledger Technology in securities services

News

Luxembourg adopts law introducing Distributed Ledger Technology in securities services

20 February 2019

Regulatory News Alert

According to an official notice published on 14 February, Luxembourg’s Chamber of Deputies passed the Bill of Law 7363 (“the Law”) providing a legal framework for securities issued over Distributed Ledger Technology (DLT).

The Law aims to provide financial market participants with more transparency and legal certainty in regards to the holding and circulation of securities with DLT by granting the transactions done with this new technology the same legal status and protection as those done through traditional means.

The holding and circulation in DLT can be organized via security tokens. These tokens may have an investment dimension and could be considered as assets providing rights such as ownership, payment of specific sum of money (dividend) or entitlement to a share in future profits, cash flows.

Tokenization has the potential to enhance the liquidity and access of certain financial assets by making transfer of ownership easier and faster. Furthermore, the objectives of the Law is to provide appropriate legal protection for investors and make the transfer of securities more efficient throughout the security value chain.

The Law is a first step in this direction and is aligned with other European initiatives which provide DLT and security token a local legal framework. Further scrutiny of the DLT and security token developments, as well as related regulatory framework at European and local level, will be needed in the future.

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How Deloitte can help you?

Deloitte can help you to gain awareness on the subject and design your pragmatic strategy to allow you to manage the evolution of this new technology and to identify the potential impacts Distributed Ledger Technology may have on the securities value chain, including issuance, trading, post trading and custody services.

We will support you on various critical dimensions such as strategy, business & operating models, regulatory & compliance, technology, and risk management.

Contacts

Laurent Collet
Partner – Strategy Regulatory &
Corporate Finance
Tel : +352 45145 2112
lacollet@deloitte.lu

Simon Ramos
Partner – IM Advisory & Consulting Leader
Tel : +352 45145 2702
siramos@deloitte.lu

Patrick Laurent
Partner – Technology & 
Innovation Leader
Tel : +352 45145 4170
palaurent@deloitte.lu

Thibault Chollet
Director – Technology & Enterprise Applications
Tel : +352 45145 2656
tchollet@deloitte.lu

Benoit Sauvage
Senior Manager – RegWatch, 
Strategy & Consulting
Tel : +352 45145 4220
bsauvage@deloitte.lu

Marijana Vuksic
Manager – Regulatory & Consulting
Tel : +352 45145 2311
mvuksic@deloitte.lu

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