Tokenised securities: a new roadmap for market participants and regulators in Asia

https://www.linklaters.com/en/insights/blogs/fintechlinks/2019/november/tokenised-securities-a-new-roadmap-for-market-participants-and-regulators-in-asia
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ASIFMA, the financial industry’s leading trade association in Asia, has released a new roadmap to tokenised securities for market participants and regulators. The paper was developed in collaboration with its members, including Linklaters. As well as highlighting key issues for issuers and financial institutions, it sets out what is needed from a regulatory and technology perspective to build a strong enabling environment.

A new roadmap to tokenised securities

The Asia Securities Industry and Financial Markets Association (ASIFMA) has released a new paper entitled “Tokenised Securities: A Roadmap for Market Participants and Regulators”.

The paper aims:

  • to act as a roadmap for incumbent financial institutions that wish to understand how a tokenised offering can be executed;
  • to inform issuers about the key issues that will be relevant to their stakeholders; and
  • to articulate what is needed from a regulatory and technology perspective to build a strong and enabling environment.

It does so by examining key aspects of the tokenised security lifecycle, including structuring, issuance, distribution, primary listing, secondary trading, custody, portfolio management, advisory and market making.

The paper has been developed in collaboration with ASIFMA members, including Linklaters, with input from several exchanges and technology platforms.

Tokenised securities vs security tokens

The paper distinguishes between “tokenised securities” (which represent securities that exist outside of a blockchain) and “security tokens” (which are “blockchain native” and do not exist in any other form). It is more focused on the former. However, it acknowledges that the differentiation between the two types might blur over time, and that much of the paper can apply to both.

ASIFMA’s outlook

Whilst acknowledging that the extent and timing of adoption remains uncertain, ASIFMA lays out its belief that “tokenised securities will impact traditional finance and act as a bridge between legacy finance and the new digital world”. It also notes that it can “contemplate a future scenario where security tokens (blockchain-native securities) are the norm”.

Click here to read the full report.

https://www.linklaters.com/en/insights/blogs/fintechlinks/2019/november/tokenised-securities-a-new-roadmap-for-market-participants-and-regulators-in-asia