France Relocations Forward With Blockchain for Certain Securities Exchanges

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France Move on With Blockchain for Certain Securities Exchanges

Following the adoption of Act no.2016-1691, dated 9 December 2016, on Transparency, Anti-Corruption, and Modernization of Economic Life (“Sapin II”– see our compliance protection here )and the publication of its responses to a public consultation request on 30 August 2017 (see our coverage here), the French Ministry of Finance released a draft document focused on adjusting the French legal structure to using blockchain technology.The draft(which

might be accessed in French here)addresses the possibility for companies, to register the following instruments with a” shared electronic computer system registry “: Negotiable financial obligation securities; Units or shares of endeavors for cumulative investment; Capital securities issued by corporations and financial obligation securities aside from negotiable debt securities, supplied that they are not traded on a trading platform.The draft locations conditions on such registration. The draft expressly excludes registration of any securities admitted to

the operations of a central depository or delivered in a system for the payment and delivery of financial instruments. In addition, the laws of the issuer must specifically supply for the possibility to use a shared electronic registry.In any case, the French regulative framework would need the application of French law to any securities signed up with a shared electronic pc registry if the issuer of such securities is locateded in France or the issuance of such securities itself is already governed by French law.Additional technical measures will consequently be discussed in a supplementing Decree, in order to supply the necessary legal safeguards to blockchain technology.While evaluating the relevance of a blockchain legal structure for corporate securities stays hard in the absence of such technical information, all industry stars are welcome to provide the Ministry of

Finance with discuss the proposed framework till 9 October 2017. Copyright 2017 K & L Gates