Spain Securities Markets Act: Tokenized Securities Treatment

Law 6/2023 does not create a separate asset class merely because a security uses blockchain or another distributed ledger. Article 2 provides that financial instruments remain financial instruments when they are issued, registered, transferred, or stored using distributed ledger technology or similar technology. CNMV’s Q&A frames this in technology-neutral terms: the difference between DLT-based financial instruments and other financial instruments is the support or medium used to record them, not a change in the rights attached to the instrument.

That distinction is important for crypto-law coverage. A token may fall under securities-market rules when its characteristics and attached rights make it a financial instrument. CNMV states that classification depends on the particular characteristics and rights of the cryptoasset and should be assessed case by case, separate from its technological wrapper.

Article 6 recognizes three forms of representation for negotiable securities: book entries, titles, and systems based on distributed ledger technology. For securities admitted to trading on trading venues, the law requires book-entry representation or DLT-based representation within the EU DLT Pilot Regime framework. Where an issuer selects a DLT-based system, the system must support issuance integrity and immutability, identify holders directly or indirectly, and determine the nature, characteristics, and number of the securities.

The law also requires an issuance document for book-entry or DLT-based negotiable securities. For DLT-based securities, that document must identify the entity responsible for administration of the inscription and registry and include sufficient information about the system, including main features of its operation and governance. Article 8 then requires the issuer to designate one or more responsible entities for the DLT registry, commonly referred to in Spain as ERIR.

Article 11 provides that the transfer of DLT-represented negotiable securities occurs through the transfer recorded on the distributed ledger, and that the registration in favor of the acquirer has the same effects as delivery of physical titles. The transfer is opposable to third parties from registration. Additional provisions address liens, enforcement events, succession transfers, legitimating certificates, and the presumption that the person shown in the relevant registry is the legitimate holder for purposes of exercising rights against the issuer.

Royal Decree 814/2023 develops Law 6/2023 on financial instruments, representation of negotiable securities, trading admission, prospectus-related matters, clearing, settlement, registry and market infrastructures. For DLT-based securities, it requires the entity responsible for administration and registry to maintain a contingency plan for incidents affecting the network or continuity of the registry. Royal Decree 815/2023 requires CNMV to maintain a public official register of the entities responsible for administering the inscription and registry of DLT-represented negotiable securities for each issuance.