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A new era of Securities Law has begun: Electronic Securities Act (eWpG) comes into force

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Dr Stefan Henkelmann

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Dr Daniela Schmitt

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12 May 2021

On 6 May 2021, the German Bundestag adopted the Electronic Securities Act (eWpG) in the form proposed by the Finance Committee.

The introduction of electronic securities is intended to make the German financial market more viable in the future and, at the same time, to protect the integrity, transparency and functioning of the markets. The eWpG will enter into force on the day after its promulgation.

In line with other European countries, Germany will now also make it possible to issue electronic securities – including cryptosecurities based on the blockchain technology. The central point of the new provisions is the abandonment of the requirement of the documentary securitisation of securities, which can be replaced henceforth by an entry in an electronic securities register. To preserve the legal certainty of the acquisition and transfer of securities which has grown in practice and theory over the decades, electronic securities will be legally equated with securities securitised in documentary form.

The eWpG will in a first step allow the issuance of electronic bearer bonds as well as, in a limited form, of unit certificates for special assets, and it does allow for a future extension to cover other bearer instruments, e.g. stocks. At the same time it will remain possible to issue securities securitised in a documentary form. Issuers will thus have the choice to either securitise newly issued securities in a documentary form or to issue electronic securities.

We have compiled all relevant information on the eWpG for you in a client bulletin. Click on the link below to find out more about the background and content as well as our evaluation and outlook.