How to Issue Tokenized Securities Under the Swiss DLT Act — Complete Guide

How to Issue Tokenized Securities Under the DLT Act

Issuing tokenized securities as Registerwertrecht under the DLT Act requires navigating Swiss securities law, selecting appropriate smart contract infrastructure, and engaging with regulated trading and settlement platforms. This guide provides the step-by-step process for corporate issuers — from feasibility assessment through primary issuance and secondary market listing.

Step 1: Determine Token Classification

Before issuance, determine how FINMA will classify your token. Tokenized bonds, shares, fund units, and derivatives are classified as asset tokens (securities). This classification triggers prospectus requirements under the Financial Services Act (FinSA) unless a specific exemption applies.

Common exemptions: private placement to fewer than 500 investors, minimum denomination of CHF 100,000 per unit, placement exclusively with professional clients (institutional investors, qualified wealth managers). If no exemption applies, prepare a full FinSA-compliant prospectus reviewed by a FINMA-recognized reviewing body.

Step 2: Structure the Legal Framework

The token must represent a Registerwertrecht — a ledger-based security under Article 973d of the Code of Obligations. Required elements include a qualified electronic register (the blockchain) satisfying the three requirements of power of disposition, integrity, and transparency. The registration agreement specifies the rights represented by the token, the terms of registration and transfer, and the governance mechanisms for the register.

Engage legal counsel experienced with DLT Act tokenization. CMTA member firms provide specialized advisory services for structuring compliant tokenized securities.

Step 3: Select Smart Contract Infrastructure

Use the CMTAT (CMTA Token Standard) for smart contract deployment. CMTAT provides audited, modular smart contracts implementing Swiss law requirements including corporate actions (dividends, voting), compliance controls (transfer restrictions, KYC gates), and register management.

Deploy on an Ethereum-compatible blockchain for maximum interoperability, or on a purpose-built enterprise DLT for controlled-access environments. The technology choice does not affect legal validity — the DLT Act is technology-neutral.

Step 4: Engage a Tokenization Agent

Licensed financial institutions provide tokenization agent services — managing the legal and technical process of creating Registerwertrecht on a distributed ledger. Sygnum Bank offers a tokenization platform, and SDX provides institutional-grade tokenization infrastructure. Citi recently joined SDX as a tokenization agent for pre-IPO shares.

Step 5: Primary Distribution

Distribute tokens to investors through regulated channels. If a prospectus exemption applies, distribute directly to qualifying investors. If a full prospectus is required, publish the prospectus and distribute through licensed intermediaries. AML/KYC compliance applies to all investor onboarding.

Step 6: Secondary Market Listing

List the tokenized security on a licensed DLT trading facility for secondary market trading. SDX provides institutional-grade listing with wholesale CBDC settlement through Project Helvetia. BX Digital offers broader market access including retail investors.

Step 7: Ongoing Compliance and Lifecycle Management

After issuance, the tokenized security enters its lifecycle management phase. Ongoing obligations include continuous disclosure (material information affecting the security’s value must be disclosed to token holders and the market), corporate action execution (dividend distributions, interest payments, voting through CMTAT smart contract modules), register maintenance (updating the shareholder/bondholder registry as tokens are transferred), and regulatory reporting (periodic filings with FINMA and, for listed securities, with the DLT trading facility).

The CMTA Token Standard automates many lifecycle management functions. Dividend distributions can be executed through the DebtBaseModule (for bonds) or corporate action modules (for equity), distributing CHF stablecoins or fiat-equivalent payments pro-rata to token holders based on their holdings at a snapshot date. Voting on corporate resolutions uses the SnapshotModule to determine voting eligibility and the governance module to record votes and calculate outcomes.

Cost Breakdown for Tokenized Securities Issuance

These costs compare favorably with traditional IPO costs (CHF 500,000-2,000,000+), making tokenized securities issuance accessible to mid-market companies that cannot justify traditional capital markets access costs.

Real Estate Tokenization Specifics

Real estate tokenization under the DLT Act requires an indirect approach — direct land ownership cannot be tokenized as Registerwertrecht because Swiss property law requires cantonal land register entries. Instead, issuers tokenize corporate interests in property holding companies. The typical structure involves creating an AG or GmbH that owns the property, then tokenizing the shares of that company as Registerwertrecht.

This corporate-wrapper approach enables fractional property ownership, secondary market trading on DLT trading facilities, and automated distribution of rental income through CMTAT’s corporate action modules. BrickMark’s CHF 130 million Zurich commercial property tokenization demonstrates this pathway at institutional scale. For smaller properties, the CMTAT framework enables cost-efficient tokenization through standardized smart contracts and open-source infrastructure.

Bond Tokenization: The Swiss Success Story

Tokenized bonds represent the most successful category of Swiss tokenized securities, with CHF 750+ million settled on SDX using wholesale CBDC through Project Helvetia. The bond tokenization process follows the standard steps above, with specific considerations for bond-specific features including coupon payment schedules, maturity dates, early redemption clauses, and credit event handling.

Issuers of tokenized bonds include the World Bank (CHF 200 million), City of Lugano (serial issuances exceeding CHF 400 million), the Swiss National Bank (CHF 64 million in SNB Bills), and various cantonal and corporate issuers. The institutional diversity of these issuers — ranging from supranational organizations to municipalities to central banks — validates the DLT Act framework’s production readiness for institutional-grade bond tokenization.

Pre-IPO Share Tokenization

Citi’s 2025 partnership with SDX launched tokenization of pre-IPO shares — equity in private, venture-backed companies that are not yet listed on traditional exchanges. This product category addresses the growing demand for secondary market liquidity in private equity, enabling early-stage investors, employees with stock options, and other pre-IPO shareholders to access liquidity without waiting for an IPO or acquisition event.

Pre-IPO share tokenization follows the standard Registerwertrecht issuance process with additional considerations for private company governance. Transfer restrictions (right of first refusal, board approval for transfers, investor qualification requirements) are implemented through CMTAT’s ValidationModule, ensuring that tokenized share transfers comply with the company’s shareholder agreement and articles of incorporation.

Tax Implications of Tokenized Securities

The Swiss crypto tax framework treats tokenized securities identically to their traditional counterparts. Interest income from tokenized bonds is taxable income for Swiss investors. Dividend income from tokenized shares is taxable income, subject to the 35% withholding tax that applies to Swiss-source dividends (reclaimable by Swiss tax residents). Capital gains on tokenized securities held as private assets are tax-free for Swiss private investors, consistent with the capital gains exemption for traditional securities.

For issuers, the issuance of tokenized securities does not create different tax consequences than traditional securities issuance. Stamp duty (Emissionsabgabe) applies to equity issuance at 1% of the issuance proceeds, while bond issuance is generally exempt from stamp duty. The tax treatment of tokenized securities is settled law — no uncertainty or additional tax burden arises from the tokenization format.

Step 8: Investor Relations and Ongoing Reporting

Tokenized securities require investor relations management comparable to traditional securities. Issuers must provide regular financial reporting, material event notifications, and corporate action announcements to token holders. The CMTAT smart contract infrastructure can facilitate some of these communications through on-chain notifications and automated dividend or interest distributions.

For securities listed on SDX or BX Digital, the DLT trading facility’s listing rules specify continuous disclosure obligations including financial statement publication, material event notifications, and price-sensitive information management. Issuers must maintain compliance with these listing rules throughout the security’s lifetime to avoid delisting or trading suspension.

Risk Assessment for Tokenized Securities Programs

Issuers should conduct comprehensive risk assessment before launching tokenized securities programs. Smart contract risk requires evaluation of the CMTAT deployment’s security through professional audits and ongoing monitoring. Regulatory risk requires monitoring of evolving FINMA guidance and Federal Council legislative proposals that may affect the token’s classification or compliance obligations. Market risk requires assessment of secondary market liquidity expectations — tokenized securities on Swiss DLT trading facilities may experience lower liquidity than traditional exchange-listed securities, particularly in the early stages of platform adoption.

Operational risk requires evaluation of the issuer’s capacity to manage tokenized securities lifecycle events (dividend distributions, voting, corporate actions) through smart contract infrastructure rather than traditional transfer agents. Custody risk requires evaluation of the chosen custodian’s operational resilience, insurance coverage, and compliance with DLT Act segregation requirements. Reputational risk requires assessment of market perception — some investors may view tokenized securities as novel and potentially risky, while others recognize the efficiency advantages of blockchain-based ownership and settlement.

SME Tokenization: Practical Pathway

Swiss SMEs represent the largest potential market for tokenized securities, with over 600,000 registered companies that traditionally lack access to public capital markets. The CMTAT standard reduces tokenization costs to a level accessible to mid-market companies: a Swiss AG with CHF 5 million in annual revenue can tokenize its shares as Registerwertrecht for CHF 60,000-150,000 — a fraction of traditional IPO costs.

The practical pathway for SME tokenization involves selecting a qualified legal and tokenization advisory team, defining the token structure (equity shares, participation certificates, bonds), preparing the registration agreement and prospectus (or confirming an exemption applies), deploying the CMTAT smart contract, conducting the primary distribution to qualifying investors, and listing on a DLT trading facility for secondary market trading. The entire process, from feasibility assessment to first trading day, typically takes 3-6 months — faster than traditional IPO timelines of 6-18 months.

Cross-Border Distribution of Swiss Tokenized Securities

Swiss-issued Registerwertrecht can be distributed internationally, subject to compliance with each target jurisdiction’s securities regulation. Within Switzerland, distribution follows FinSA requirements with standard prospectus or exemption analysis. For EU distribution, compliance with MiCA (for crypto-assets not covered by MiFID II) or national securities regulation (for financial instruments covered by MiFID II) is required. For Asian distribution, Sygnum’s Singapore presence and SBI Digital Markets’ partnership with SDX provide institutional distribution channels.

The CMTA Token Standard’s transfer restriction module enables jurisdiction-specific compliance controls: blocking transfers to addresses in jurisdictions where the token has not been registered for distribution, limiting transfers to verified addresses that have completed jurisdiction-appropriate KYC procedures, and enforcing maximum holder limits required by private placement exemptions. These programmable compliance controls enable multi-jurisdictional distribution within a single smart contract framework.

Ongoing Lifecycle Management and Corporate Actions

Tokenized securities require active lifecycle management throughout their existence. Bond tokens require coupon payment execution on scheduled dates, maturity processing at the bond’s end of life, and potential early redemption handling if the terms permit call provisions. Equity tokens require dividend distribution execution when declared by the board, voting administration for shareholder meetings, and capital events processing for stock splits, rights issues, or share buybacks. The CMTAT framework automates many of these lifecycle functions through smart contract modules, reducing operational burden compared to traditional securities administration. However, the issuer remains responsible for initiating corporate actions, ensuring compliance with corporate law requirements for each action, and maintaining accurate records for regulatory reporting and tax compliance. The lifecycle management capability of CMTAT-based tokenized securities represents a significant efficiency improvement over traditional transfer agent-managed securities, reducing administrative costs and settlement times while maintaining full compliance with Swiss corporate law and DLT Act requirements.

The Swiss tokenized securities issuance process, built on the DLT Act’s Registerwertrecht framework and the CMTAT open-source standard, provides the most comprehensive regulated pathway for institutional-grade securities tokenization available globally. The combination of clear legal instruments, standardized smart contract infrastructure, regulated trading venues with wholesale CBDC settlement, and institutional banking support creates an end-to-end ecosystem that reduces issuance costs, settlement times, and operational complexity compared to traditional securities issuance while maintaining equivalent legal protections and regulatory oversight for investors and issuers alike.

For regulatory requirements, see FINMA token classification and the DLT Act. For real estate tokenization specifics, see our DeFi section. For DAO governance of tokenized equity, explore our governance coverage. For settlement data, visit dashboards. Contact info@suissedao.com for tokenization intelligence.