The Luxembourg Stock Exchange this week admitted its first digital covered bonds, OFH Tokens, to its Securities Official List (SOL), marking a major step for market digitisation.
Issued by Société Générale’s digital assets subsidiary SG Forge on the Ethereum and Tezo public blockchains, the three series of security tokens are financial instruments and debt securities.
According to a joint press statement, the tokens are “compliant with the CAST open-source interoperability and securitization framework.”
The announcement comes at a moment of acceleration for 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.”
“[…] a very first building block in our contribution towards price discovery and transparency of financial instruments issued using DLT.”
Julie Becker
The two firms point out that native security tokens issued on DLT “allow for a fully digital issuance process and lifecycle.”
Native security tokens can improve efficiency and transparency in financial markets and make transactions safer and more resilient, the firms reckon.
While the security tokens will not be admitted to trading on LuxSE’s markets, the stock exchange says that their registration will “provide enhanced visibility to security tokens and their issuers, and furthermore facilitate the dissemination of indicative prices and securities data on this new form of financial instruments.”
LuxSE CEO Julie Becker said: “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.”
LuxSE said its new service will only be available to experienced issuers and applicants with a proven track record in capital markets transactions. Currently, only debt securities can be admitted on LuxSE SOL.
Meanwhile LuxSE published these guidelines to issuers of security tokens onto SOL.
