Introducing a new central register for the issuance of electronic securities
Following the implementation of the new law on electronic securities in Germany (eWpG), Clearstream Banking AG will introduce a new central register for the issuance of electronic securities and including the provisioning of contractually relevant information of these instruments.
Law on Electronic Securities in Germany (eWpG)
On 10 June 2021, the German Federal Government enacted the new law on electronic securities (eWpG) and therewith prepared the way for establishing electronic securities as an alternative to securities issued via a physical certificate. The law is built on the blockchain strategy of the German Federal Government and targets bearer bonds (that is bonds, warrants and certificates) as well as investment funds. Depending on the type of register, where the electronic security is issued, it qualifies either as central register security or as crypto security. Following the provisions in Sec. 15 and 23 eWpG, the Federal Ministry of Finance together with the Federal Ministry of Justice and Consumer Protection are further specifying the requirements of the central register and the crypto securities register.
In future, investors will receive reliable and comprehensive documentation and information for their electronic securities. According to the eWpG, no disposal of electronic securities may take place outside the register which in turn means that if an electronic security is not manifested in such register, it will be considered ineffective. Also, the processing during the entire lifecycle of the electronic security is made fully transparent.
The central register
To enable the issuance and trading of electronic securities, the central register needs to be implemented as a crucial part of the financial infrastructure. Therefore, Clearstream will introduce a new central register according to Sec. 12 eWpG. One of the main tasks of the central register is to provide legally binding and contractual relevant information about the electronic securities that have been issued in the register. It reflects the entire lifecycle of the electronic securities, including mark-up / mark-down and maturities as well as further corporate actions. For physical securities, this information is usually stored in the global note and its terms and conditions.
A precondition to the final entry into the central registry is the publication of the filed terms and conditions of the electronic security according to Sec. 5 eWpG. These terms and conditions will be published from Clearstream via a dedicated application called Public Node which is available to the public.
Learn more about the D7 strategy of Deutsche Börse Group
The central register is part of Deutsche Börse’s D7 platform. If you are interested in learning more about the D7 functionalities and its components, please click here.
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