Metzler Asset Management has embarked on a three-month pilot to issue what it claims is the first tokenised fund shares in Germany. Set up to comply with Germany’s Electronic Securities Act (eWpG) and Crypto Fund Units (KryptoFAV) regulation, which allow certain tokenised funds to be issued without a CSD, but with a DLT registering ownership, the trial is expected to be a demonstration of how tokenised assets can be regulated.
Because it’s a pilot, investment in the fund is not available to the public. According to Ledger Insights, Metzler has partnered with Fundsonchain and Cashlink to facilitate the trial. Fundsonchain is a start-up that has worked with the likes of BNP Paribas Securities Services and Allianz Global investors on end-to-end processing for tokenised funds. This project marks the firm’s first issuance. Cashlink is an experienced player in the digital asset space, having acted as registrar for several of Deutsche Bank’s below-the-radar note issuance last year. In this pilot, its responsibility is the crypto securities register.
The eWpG was previously put into action when Deutsche Börse Group’s Clearstream supported several bond issuances on its D7 platform. Siemens also issued a €60 million bond on a public blockchain in compliance with eWpG earlier this year.