DLT Act (Swiss Federal DLT Legislation)

The Swiss Federal Act on the Adaptation of Federal Law to Developments in Distributed Ledger Technology — commonly referred to as the DLT Act — entered into force on 1 February 2021. The legislation amended ten existing federal statutes rather than creating a new standalone act, embedding DLT-specific provisions throughout Swiss financial, commercial, and insolvency law. The DLT Act is widely regarded as one of the most technically sophisticated and practically effective legislative responses to the emergence of tokenized assets, providing legal certainty that preceded comparable measures in most other jurisdictions.

Key Innovations

Ledger-Based Securities (Registerwertrechte)

The most significant innovation of the DLT Act is the introduction of Registerwertrechte — translated as ledger-based securities or DLT rights — under a new Article 973d et seq. of the Swiss Code of Obligations. A Registerwertrecht is a right (typically a bond, share, or other claim) that is incorporated into a DLT register in such a manner that:

• The right can only be exercised and transferred via the DLT register
• The register is structured to protect against unauthorised modification
• Each participant has access to their own entry and can verify the entries of others

Before the DLT Act, Swiss securities law required either a paper instrument (Wertpapier) or registration in a central intermediary’s book-entry system to create a legally transferable security. The Registerwertrecht creates a third category: a security that exists solely on the distributed ledger, with no underlying paper instrument and without requiring central intermediary registration. This enables true peer-to-peer transfer of legal title to securities on-chain — the holy grail of tokenized capital markets.

Importantly, holders of Registerwertrechte enjoy segregation protection in insolvency: DLT-based securities held by a custodian are legally segregated from the custodian’s estate and must be returned to the beneficial owner — a position that mirrors the treatment of traditional book-entry securities but had previously been legally uncertain for crypto-assets.

DLT Trading Facility Licence

The DLT Act introduced a new DLT Trading Facility (DLT-Handelssystem) category under the Financial Market Infrastructure Act (FMIA). This licence allows a single entity to operate the functions of trading, clearing, and settlement for DLT-based securities simultaneously — a combination of functions that, in traditional markets, must be held by separate, independent entities (exchange, CCP, CSD). The DLT Trading Facility licence recognises that vertically integrated DLT platforms can perform all three functions simultaneously in an atomic settlement model, while maintaining regulatory oversight equivalent to the separated model.

SIX Digital Exchange (SDX) became the first and, as of early 2026, only entity to receive a DLT Trading Facility licence from FINMA, alongside its existing bank licence. SDX operates a permissioned, institutional-grade infrastructure built on R3 Corda, offering issuance, trading, and CSD services for tokenized securities.

FINMA Supervision

The Swiss Financial Market Supervisory Authority (FINMA) supervises all entities involved in tokenized securities activities under the DLT Act framework. FINMA had previously issued:

• FINMA ICO Guidelines (2018): Classifying tokens as payment, utility, or asset tokens and applying existing financial market law by function.
• FINMA Guidance on DLT Securities (2021, updated 2023): Clarifying how the Registerwertrecht interacts with existing securities depository and transfer agent rules.
• AML/CFT requirements: VASPs (including DLT Trading Facilities and token exchanges) must comply with the Anti-Money Laundering Act and register with a FINMA-supervised self-regulatory organisation (SRO) or obtain direct FINMA supervision.

FINMA takes a substance-over-form approach: the economic function of a DLT-based instrument determines its regulatory treatment, not its technical form. A Registerwertrecht that grants shareholder rights is regulated as equity; one granting fixed income claims is regulated as a bond.

Comparison to EU DLT Pilot Regime

Switzerland’s approach contrasts instructively with the European Union’s DLT Pilot Regime (Regulation 2022/858):

The Swiss approach offers legal permanence and no sunset risk — significant for issuers committing to long-duration instruments — but is limited to Swiss-law securities. The EU Pilot Regime provides access to the EU single market but imposes volume caps and has a defined review period.

Market Impact

Since the DLT Act’s entry into force, Switzerland has attracted a significant pipeline of tokenized security issuances, including digital bonds from UBS, Basler Kantonalbank, Luzerner Kantonalbank, and the Swiss National Railway (SBB). SDX has processed issuances and settlements for these instruments. FINMA has also supervised the launch of several FINMA-authorised token issuance platforms and cryptocurrency banks (SEBA Bank and Sygnum Bank), further consolidating Switzerland’s position as a leading jurisdiction for institutional tokenized assets.

Related entries: Smart Contract, Atomic Settlement (DvP), Security Token, Permissioned Blockchain

Primary source: FINMA DLT Guidance | BIS Paper on Swiss DLT Framework