12 Feb, 2020
The Swiss Financial Market Supervisory Authority FINMA published a supplement to its ICO guidelines outlining how it treats so-called ‘stable coins’ under Swiss supervisory law.
Learn more on the official website.
As far as we see, this is not about the initial public offering (IPO) of tokenized shares on a blockchain, but about security token offering shares issued on a blockchain with a registry on the blockchain.
✅ Why did this STO get such attention?
The fact is that today, as equity companies in Switzerland and Liechtenstein tokenized mainly participation certificates or profit participation certificates — analogues of non-voting shares.
Tokenization of voting shares is associated with several complex issues both from the technical side and from the legal one. For example, it is not entirely clear how to implement shareholders’ notifications and voting in case of their large number and keeping the register on the blockchain.
✅ What kind of “FINMA compliance” can be discussed in the issuer’s prospectus, what do they mean?
Confusion arose in a Coindesk article. Everyone began to seek licensing or approval of the prospectus by FINMA. But there is no prospect and cannot be. Until the end of 2019, the old regulation was in force regarding the issuance of the prospectus of securities under the law of obligations, under which approval of the prospectus of FINMA was not required. The prospectus was released on December 30, 2019. However, in fact, many projects sought to receive feedback from FINMA on their prospectus.
✅ Since the beginning of 2020, several laws and regulations governing financial markets have come into force, see https://www.finma.ch/en/authorisation/fidleg-und-finig/. FINMA approval is required by the Financial Services Act (FinSA) and the Financial Institutions Act (FinIA).
The “approval” referred to in the article referred to the approval by the trade registry of the company’s charter for registration, taking into account the mention of shares and the shareholder register on the blockchain.
Nevertheless, when attracting investors’ money, the project must comply with the requirements of KYC & AML, i.e. check who the project investors are and where they got the money from. It is precisely this compliance with the FINMA requirements that are mentioned in the prospectus.
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