On the 16th December 2020, the German cabinet passed a draft legislation intended to allow the possibility for shares to be issued and registered in an electronic manner. This move has been applauded by stakeholders as it follows the German government’s push to integrate blockchain technology within the national systems and to modernise the German financial center.
Following the implementation of the draft legislation, securities may be either issued in the traditional manner whereby a paper certificate would be issued with the issuance of the security to the owner or issued electronically and thereafter registered on an electronic-based registry, which may also be based on blockchain technology.
Prior to the draft legislation, German security holders and issuers were forced to use paper certificates for security transactions. However, with the implementation of the proposed electronic securities system, holders and issuers will be able to issue and register their securities electronically reducing costs and administrative work.
Feel free to contact us should you require any further information on the draft German legislation on electronic securities.