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Bill 7637 – Luxembourg adds the missing piece for the issuance and circulation of blockchain securities

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05 August 2020

Bill of law 7637 (the Bill) notably amends the Luxembourg act dated 6 April 2013 on dematerialised securities (the Dematerialised Securities Act 2013) by:

  • expressly recognising the use of blockchain or other distributed ledger technology (DLT) to record the issuance of Luxembourg law governed dematerialised securities (by serving as the primary register of such issuance); and
  • opening the role of the central account keeper to EU credit institutions and investment firms (meeting specific organisational and technological criteria).

The Bill is a continuation of the Luxembourg act dated 1 March 2019 which expressly recognised the use of DLTs in the context of the circulation of securities. The Bill gives legal certainty to issuers to directly issue DLT securities by keeping their securities’ registers on a distributed ledger (such as a blockchain).

The Bill also allows a broader array of players to facilitate such DLT issuances by acting as the central account keeper for such issuances.

By catering for the direct issuance of Luxembourg law governed securities on distributed ledgers, the Bill adds the missing piece to the Luxembourg legal framework for the issuance and circulation of securities within a DLT environment. This Bill reinforces Luxembourg as a legal hub for issuing DLT securities as issuers from around the world will be able to rely on a sound legal framework to issue and settle securities directly on DLTs.