Swiss Federal Council Brings Distributed Ledger Tech or DLT Act Fully into Force and Issues Ordinance

The Swiss Federal Council, the seven-member executive council that constitutes the federal government of the Swiss Confederation and serves as the collective head of state and government of Switzerland, announced recently that the DLT Act has come “fully into force” and the agency also  issued an ordinance.

As mentioned in the announcement from the Swiss Federal Council:

“During its meeting on 18 June 2021, the Federal Council brought the Federal Act on the Adaptation of Federal Law to Developments in Distributed Electronic Register Technology fully into force as of 1 August 2021. The associated blanket ordinance will also enter into force on the same day. This will allow for innovative DLT trading facilities and increase legal certainty in the event of bankruptcy.”

As stated in the update, the Parliament passed, in September 2020, the distributed ledger technology (DLT) blanket Act, which “selectively adapts ten existing federal laws.” As confirmed in the announcement, the blanket ordinance that has now been adopted “summarizes the necessary adjustments to ten ordinances.”

The update also mentioned that the legislation enhances the existing conditions for blockchain and DLT firms operating in Switzerland, which should help with making the nation a global pioneer in “modern regulation of innovative financial market technologies.”

As noted in a release from the Swiss Federal Council, one of the main changes that will come into effect on August 1, 2021, is a license for DLT trading facilities, “i.e. financial market infrastructures for DLT securities that can admit other companies and persons to trading in addition to financial intermediaries.”

As mentioned in the release, legal certainty will be “increased in insolvency law by explicitly regulating the segregation of crypto-based assets in the event of bankruptcy.”

The announcement further noted:

“The adopted amendments to the Swiss Code of Obligations, among others, already came into force on 1 February 2021. These enabled the introduction of uncertificated securities on a blockchain. No amendments at ordinance level were necessary for those provisions.”

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