SocGen launches DLT security tokens on Luxembourg Stock Exchange

The Luxembourg Stock Exchange (LuxSE) and Societe Generale have marked the admission of the first financial instruments registered on a public Distributed Ledger Technology (DLT) on LuxSE’s Securities Official List (LuxSE SOL).

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 at a time of 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, permitting the processing of security tokens through market infrastructures in compatibility with applicable EU regulations within a transitional period.

Announcing the move, LuxSe said native security tokens issued on DLT allow for a fully digital issuance process and lifecycle.

Since April 2019, Societe Generale and its subsidiary SG - FORGE, which is dedicated to the development of digital assets, have structured several native security tokens issuances deployed on DLT clients with the most recent being the European Investment Bank’s (EIB) 100m€ digital bond issued in 2021.

Arnaud Jacquemin, CEO of Societe Generale Luxembourg and member of the Societe Generale group management committee, commented: “Leveraging the differentiating expertise of the SG - FORGE teams, our intimate knowledge of the Luxembourg capital market environment and our close relationship with LuxSE, this first-ever listing shows our institutions’ capacity to step-by-step implement a truly innovative technology, thus helping build tomorrow’s global capital market distribution approach and infrastructure”.

LuxSe added that 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.

Julie Becker, CEO of LuxSE said: “The admission of security tokens on the Luxembourg Stock Exchange Securities Official List represents a true milestone for EU financial markets as it provides for a unique, innovative, robust, and publicly accessible solution for issuers and investors of these instruments. 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.”

“We are delighted to welcome Societe Generale, a leading institution in the DLT space, as the first issuer of security tokens at our exchange and are confident that other issuers will follow suit as more and more market participants capitalize on this disruptive technology.”

To clarify the eligibility criteria and guide issuers of security tokens through the admission process, LuxSE today published guidelines for the registration of DLT financial instruments onto SOL Guidelines for the registration of DLT financial instruments onto SOL.

To be considered for admission on LuxSE SOL, security tokens will need to respect these guidelines as well as the LuxSE SOL Rulebook, the organisation said.

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