Ledger-based securities and DLT trading facilities

The new category in the Code of Obligations

The central innovation of the DLT Act is the ledger-based security (Registerwertrecht, in Italian diritto valore registrato), regulated in Articles 973d to 973i of the Federal Act of 30 March 1911 on the Amendment of the Swiss Civil Code (Part Five: The Code of Obligations), SR 220. Article 973d paragraph 1 CO defines it as a right which, in accordance with an agreement between the parties, is registered in a securities ledger and may be exercised and transferred to others only via this securities ledger. The definition has two elements. The right must be entered in a ledger that meets the statutory requirements, and the parties must have agreed in a registration agreement that the right can be exercised and transferred only through that ledger. According to the dispatch, any right that could also be embodied in a certificated security can become a ledger-based security, for example a claim, a membership right such as a share in a company, or a right of the kind embodied in documents of title to goods, provided it is freely transferable.¹

Article 973d paragraph 2 CO lists the requirements for the ledger. It must use technological processes that give the creditors, and not the obligor, the power of disposal over their rights. Its integrity must be protected by adequate technical and organizational measures against unauthorized modification, for example through joint management by several independent participants. The content of the rights, the functioning of the ledger and the registration agreement must be recorded in the ledger or in linked accompanying data. Creditors must be able to view the relevant information and ledger entries and to check the integrity of the ledger contents relating to them without the intervention of a third party. Under paragraph 3 the obligor must ensure that the ledger is organized in accordance with its intended purpose and operates in accordance with the registration agreement at all times.² The requirements do not name a technology. A public blockchain such as Ethereum or Bitcoin, a permissioned ledger operated by several banks or another distributed register can satisfy them, provided that the creditor controls the right and can verify the register independently.

Effects, transfer and the protection of good faith

The following provisions give the ledger-based security the functions of a classic security. Under Article 973e CO the obligor is entitled and obliged to perform only to the creditor shown in the ledger, and performance to that creditor releases the obligor unless it acted with intent or gross negligence. A person who acquires a ledger-based security from the creditor shown in the ledger is protected in the acquisition even if the transferor had no power of disposal, unless the acquirer acted in bad faith or with gross negligence. The obligor can raise only defences that challenge the validity of the registration or arise from the ledger or its accompanying data, defences that it has personally against the current creditor, and defences based on its direct relationship with an earlier creditor where the current creditor knowingly acted to the detriment of the obligor in acquiring the security. Article 973f CO governs the transfer, which follows the rules of the registration agreement. Article 973g CO allows security interests to be created without a transfer of the right, provided the security interest is visible in the ledger and the secured creditor has exclusive power of disposal in the event of enforcement. Article 973h CO allows the person entitled to ask the court to cancel a ledger-based security if it shows credibly that it had the power of disposal and lost it, for example through the loss of a private key. After cancellation that person can assert the right outside the ledger or demand a new ledger-based security from the obligor at its own cost. Article 973i CO requires the obligor of a ledger-based security, or of a right offered as such, to inform every acquirer about the content of the right, the functioning of the ledger and the measures that protect its integrity, and it makes the obligor liable for damage caused by incorrect or misleading information.³

For a Ticino company the practical significance lies in company law. Since the DLT Act, Article 622 paragraph 1 CO allows the shares of a stock corporation to be issued as ledger-based securities, and the articles of association must provide for this. A Lugano società anonima can therefore issue tokenized shares that its shareholders hold in wallets and transfer on a blockchain, without the written assignment and endorsement that the transfer of registered shares otherwise requires. The company must keep its share register and the list of beneficial owners reported to it under Article 697j CO up to date and, since 1 October 2026, report them to the federal transparency register described in Chapter G.IV.⁴ Tokenization does not dispense with corporate transparency. It replaces the paper instrument of transfer by an entry in a register whose operation the company must control.

Notes

1. Art. 973d para. 1 CO, text at https://lawbrary.ch/law/art/OR-v2025.01-en-art-973d. The examples of rights capable of being registered follow the dispatch on the DLT Act (above), commentary on Art. 973d CO ("Rechte, welche auch in einem Wertpapier verbrieft werden könnten"; claims, membership rights, shares, rights embodied in documents of title to goods; free transferability). ↩
2. Art. 973d paras. 2 and 3 CO (above) ("employs technological processes" giving creditors "disposal authority over their rights"; integrity protected by "multi-party independent management"; content, functioning and registration agreement recorded "in the ledger or in linked accompanying data"; creditors able to verify "without third-party assistance"; the obligor must ensure that the ledger "operates in accordance with the registration agreement at all times"). ↩
3. Arts. 973e–973i CO, text in Federal Act of 25 September 2020 on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, AS 2021 33, German text https://www.fedlex.admin.ch/filestore/fedlex.data.admin.ch/eli/oc/2021/33/de/pdf-a/fedlex-data-admin-ch-eli-oc-2021-33-de-pdf-a.pdf (Art. 973e paras. 2–4: release of the obligor unless "Arglist oder grobe Fahrlässigkeit"; protection of the acquirer "es sei denn, der Erwerber handelte beim Erwerb bösgläubig oder grobfahrlässig"; three categories of defences; Art. 973f: transfer "untersteht den Regeln der Registrierungsvereinbarung"; Art. 973g: security visible in the ledger and exclusive power of disposal of the secured creditor; Art. 973h para. 1: cancellation by the court; Art. 973i: information and liability). ↩
4. Art. 622 para. 1 CO in the version of the DLT Act, text in Federal Act of 25 September 2020 on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, AS 2021 33, German text https://www.fedlex.admin.ch/filestore/fedlex.data.admin.ch/eli/oc/2021/33/de/pdf-a/ fedlex-data-admin-ch-eli-oc-2021-33-de-pdf-a.pdf ("Die Statuten können bestimmen, dass sie als Wertrechte nach Artikel 973c oder 973d oder als Bucheffekten ... ausgegeben werden"). On the transparency register see Chapter G.IV. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of August 2025.