1. During its meeting on 22 March 2019, the Federal Council opened the consultation on the adaptation of federal law to developments in the distributed ledger technology (“DLT”). On the one hand, to increase legal certainty and, on the other hand, to remove hurdles for DLT-based applications and limit risk of misuse. In the Financial Market Infrastructure Act, a new authorisation category for so-called "DLT Trading Systems" is to be created. Those shall offer services in the areas of trading, account, settlement and custody with DLT-based assets to regulated financial market participants and retail customers.
2. Art. 2a FMIA will contain the new licence category of the DLT Trading System. DLT Trading Systems fall under the legal definition of financial market infrastructures. Most of the legal requirements that apply to the existing categories of trading venues shall also apply to this new trading system. Consequently, DLT Trading Systems are subject to the general authorisation requirements and obligations pursuant to Art. 4 seq. FMIA. Furthermore, the rules concerning oversight and supervision pursuant to Art. 83 seq. FMIA, as well as the insolvency provisions pursuant to Art. 88 seq. FMIA, will analogously be applicable.
3. Art. 73a-f FMIA deal almost entirely with the DLT Trading System. This is regarded as an institution for the multilateral trading of DLT securities, the purpose of which is the simultaneous exchange of offers between several participants and the conclusion of a contract according to non-discretionary rules. This uniform financial market infrastructure also includes post-trading services such as central custody and the settlement and account of DLT securities. These functions are currently performed by central securities depositories (Art. 61 seq. FMIA) and payment systems (Art. 81 seq. FMIA).
4. Art. 73a para. 2 FMIA defines the concept of DLT securities, according to which securities entered in a DLT-based register are transferred by means of this register. DLT securities are always securities within the meaning of Art. 2 lit. b FMIA. According to the report on the consultation draft of the Federal Department of Finance, securities issued in the form of electronically registered uncertificated securities with securities character (cf. Art. 973d CO) are included in the scope of the consultation. Furthermore, relatively similar securities issued under foreign law are also considered DLT securities. Payment tokens and pure utility tokens do not fall under the concept of DLT securities. Nevertheless, payment and utility tokens can also be traded on a DLT Trading System.
5. The content of Art. 73c FMIA was largely taken over from Art. 34 of FMIA. Pursuant to Art. 73c para. 1 FMIA, a DLT Trading System issues regulations on the admission, obligations and exclusion of participants. In contrast to multilateral trading systems, retail clients are admitted to a DLT Trading System pursuant to Art. 73c para. 2 lit. e FMIA, if they trade in their own name and for their own account. Contrary to classic exchange trading, investors (retail and institutional clients) can participate directly in a DLT Trading System and are not forced to go through an intermediary such as a securities dealer or a bank. The advantage lies mainly in the fact that no more commissions are charged to the investor. One challenge, however, is that investors need to build more on their own knowledge and experience.
6. Daura AG is not a trading venue within the meaning of the FMIA, but is solely a provider of technical infrastructure. Through the platform, Swiss companies limited by shares can keep their shareholder register automatically and digitally as well as issue new digital (tokenized) shares and participation certificates through capital increase transacations. The processing of capital increases hence gets digitized and, most importantly, non-listed companies gain access to a broad range of investors via the daura platform. Investors, on the other hand, will profit from a simple peer-to-peer transfer of shares and participation certificates via the platform. However, actual trading with blockchain-based equity tokens does not take place via the platform. Accordingly, daura will not qualify as a DLT Trading System either.