The bill of law no 7637 modifying the Luxembourg law of 5 April 1993 on the financial sector and the law of 6 April 2013 on dematerialised securities (the “Bill”) has been adopted on 21 January 2021* and aims at modernising the existing legal framework for dematerialized securities, notably by explicitly recognising the possibility to use secure electronic registration mechanisms, including distributed electronic registers or databases, for the purpose of issuing dematerialised securities.

The Bill is a continuation of the law of 1 March 2019 modifying the law of 1 August 2001 on the circulation of securities which introduced the transfer of securities through the use of secure electronic registration mechanisms, in particular where based on the technology of distributed electronic ledgers or databases. In line with the law of 1 March 2019, the Bill contributes to the efforts to promote innovation in the Luxembourg financial sector.

By legally expressly recognising the reality of distributed electronic ledgers or databases technology, the Bill aims at enabling the relevant actors to take full advantage, with more legal certainty, of the opportunities offered by these innovative technologies in the context of dematerialised securities while remaining technologically neutral.