The Luxembourg Stock Exchange (LuxSE) and Societe Generale marked the admission of the first financial instruments registered on a public Distributed Ledger Technology (DLT) on LuxSE’s Securities Official List. The three series of security tokens admitted on LuxSE SOL are digital covered bonds (OFH Tokens) and structured products that have been issued and deployed by Societe Generale’s digital assets arm, Societe Generale – FORGE (SG – FORGE), natively on the Ethereum and Tezos public blockchains respectively.
They are characterized as financial instruments and debt securities under French law and are compliant with the CAST i open-source interoperability and securitization framework. This admission takes place within a larger context marked by the acceleration of market digitalization using blockchain technology, notably through the imminent adoption of the EU Pilot Regime, which is expected to enter into force in 2022, and which will permit the processing of security tokens through market infrastructures in compatibility with applicable EU regulations within a transitional period.
Native security tokens issued on DLT allow for a fully digital issuance process and lifecycle. Due to their innovative characteristics, native security tokens have the potential to significantly improve efficiency and transparency in financial markets and make transactions safer and more resilient – all while offering benefits similar to those of financial instruments issued in a conventional way.
“This constitutes yet another significant step towards the digital transformation of the Luxembourg Stock Exchange, and a very first building block in our contribution towards price discovery and transparency of financial instruments issued using DLT,” said Julie Becker, CEO of LuxSE, in a statement, adding that there are expectations of further issuers to follow suit.