On 10 September 2020, the Swiss parliament passed a law to update existing corporate and financial regulations to make way for blockchain and distributed ledger technology (DLT), reported SwissInfo. The law comes into effect early next year. The ‘Blockchain Act’ aims to welcome decentralized technologies while maintaining Switzerland’s integrity and reputation as a business and financial hub.
We contacted the SIX stock exchange because its Digital Exchange (SDX) is expected to launch in Q4. A statement from SIX has been added below.
Unlike its neighbor Liechtenstein which created exclusively new laws for blockchain, Switzerland did not see the need to do so given its regulatory flexibility, therefore only amending its existing laws. The Swiss Federal Council specifically pointed out that because blockchain and DLT is still developing, fundamentally adapting its legal framework could have unforeseen consequences. Nevertheless, in line with the conclusion of its 2018 report that we explore below, amendments are necessary.
The recommendations aim to increase legal certainty and remove potential hurdles for the technologies. A distinction is made between payment tokens or cryptocurrencies and security tokens, which have the same legal position as traditional securities. With respect to securities law, the main change is to support the existence of tamperproof electronic registries, although details will be left up to contract. Bankruptcy laws will also be amended to make room for crypto assets as will insolvency laws, particularly for custodians that go out of business. Financial market regulations will be adjusted to create a new license category for DLT trading systems, providing more flexible authorization.
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