Introduction of the register value law

On February 1, 2021, the Federal Act on the Adaptation of Federal Law to Developments in the Technology of Distributed Electronic Registers entered into force after the referendum period had expired. This ledger-based security was introduced based on Art. 973d et seq. of the Swiss Code of Obligations. This opens up an entirely new way of dealing with shares and shareholders.

The new ledger-based security represents a right that is registered in a securities ledger according to the parties’ agreement and which may be exercised and transferred to others only via this securities ledger. As mentioned in a previous article, this represents an entirely electronic form of securities. SMEs, for example, get a completely new way to manage their shareholders when the company issues shares in this new form.

Dealing with shareholders and share transfers will be more efficient and simplified by the new provisions. As soon as a ledger-based security is transferred, this leads to an entry in the share register based on a blockchain. This makes a transfer very secure, and the share register always up to date. This also ensures an unbroken chain of ownership. This makes the management of one’s shareholders a lot easier.

Furthermore, the execution of a general meeting is simplified by a lot. Every shareholder entered in the securities ledger and owns a share is entitled to vote. If a general meeting is to be convened, an invitation with an agenda can simply be sent to all holders of a ledger-based security. This eliminates a great deal of administrative work and ensures that shareholders are fully informed. With the possibility existing under the new corporate law (apart from the temporary possibility according to the Covid Ordinance) to hold virtual general meetings, the ledger-based securities gain a further advantage. The virtual general meeting is automatically recorded and stored.