Luxembourg Stock Exchange and Societe Generale have announced the admission of the first digital financial instruments registered on public distributed ledger technology onto the exchange’s Securities Official List (LuxSE SOL).
The three series of tokens to be admitted on LuxSE SOL are digital covered bonds (OFH tokens) and structured products issued and deployed by Societe Generale – FORGE, the French financial services group’s digital division.
Launched natively on Ethereum and Tezos public blockchains, these tokens are classified as debt securities and financial instruments under French law and comply with the CAST open source framework for interoperability and securitisation.
Native securities tokens issued on DLT enable a fully digital issuance process and securities lifecycle, LuxSE and Societe Generale say in a joint statement.
The EU Pilot Regime, which is scheduled to come into operation in 2022, will push the digitalisation of financial markets using blockchain technology, allowing security tokens to be processed through market infrastructures in alignment with applicable EU regulations during a transition period.
Societe Generale reports that, since 2019, its subsidiary SG – FORGE has structured a number of digital token issuances on DLT on behalf of clients. The most recent instance was the release of a €100 million digital bond by the European Investment Bank in 2021.
Arnaud Jacquemin, Societe Generale Luxembourg CEO and member of the Societe Generale Group management committee, says: “Leveraging the differentiating expertise of the SG – FORGE teams, our intimate knowledge of the Luxembourg capital market environment and our close relationship with LuxSE, this first-ever listing shows our institution’s capacity to implement a truly innovative technology on a step-by-step basis, helping to build tomorrow’s global capital market distribution approach and infrastructure.”
LuxSE describes this development into the DLT arena as a natural next step for its digital agenda which underlines the exchange’s commitment to digitising and modernising capital markets.
Julie Becker, LuxSE’s CEO, says: “The admission of security tokens on the Luxembourg Stock Exchange Securities Official List represents a true milestone for EU financial markets as it provides for a unique, innovative and robust and publicly accessible solution for issuers and investors of these instruments.
“This constitutes yet another significant step towards the digital transformation of the Luxembourg Stock Exchange and a first building block in our contribution towards price discovery and transparency of financial instruments issued using DLT.”
