Swiss Federal Council Brings DLT Act Into Force and Issues Ordinance

Swiss Federal Council Brings DLT Act Into Force and Issues Ordinance

by June 21, 2021

The Swiss Federal Council has introduced the Federal Act on the Adaptation of Federal Law to Developments in Distributed Electronic Register Technology which will come into full force on the 1st August 2021.

The associated blanket ordinance will also enter into force on the same day. This will allow for innovative distributed ledger technology (DLT) trading facilities and increase legal certainty in the event of bankruptcy.

In September 2020, the parliament passed the DLT blanket act, which selectively adapts ten existing federal laws.

The blanket ordinance that has now been adopted summarises the necessary adjustments to ten ordinances.

The legislation improves the conditions for blockchain and DLT companies in Switzerland, thereby making the country an international pioneer in modern regulation of innovative financial market technologies.

One of the key changes that will come into force on 1 August 2021 is a license for DLT trading facilities, i.e. financial market infrastructures for DLT securities that can admit other companies and persons to trading in addition to financial intermediaries.

Legal certainty will be increased in insolvency law by explicitly regulating the segregation of crypto-based assets in the event of bankruptcy.

The adopted amendments to the Swiss Code of Obligations, among others, already came into force on 1 February 2021.

These enabled the introduction of uncertificated securities on a blockchain. No amendments at ordinance level were necessary for those provisions.

Featured image via Freepik