Law Of April 6, 2013 On Dematerialised Securities

The law of April 6, 2013 on dematerialised securities was published in Luxembourg's official gazette, the Mémorial, on April 15, coming into force the following day. It creates a third category of securities alongside securities in bearer or registered form and introduces a general regime for them. The legislation also amends various existing Luxembourg laws such as the legislation of August 1, 2001 regarding the circulation of securities and other fungible instruments.

Scope of application

In Article 1, paragraph 11, the legislation defines the securities that may be dematerialised. These comprise equity securities issued by a Luxembourg public limited company or mutual fund, such as shares, profit shares, subscription rights and fund units (but not corporate units issued by a Luxembourg private limited liability company or limited corporate partnership), as well as debt securities from a Luxembourg or foreign issuer that are governed by Luxembourg law.

Clearing entities and account holders

The regulator, the Commission de Surveillance du Secteur Financier or CSSF, may lay down specific rules regarding dematerialised securities binding on clearing entities (organismes de liquidation), account holders (teneurs de comptes) and central account holders (teneurs de compte central).

Account holders shall keep dematerialised securities held on behalf of third parties or on their own account in securities accounts with a clearing entity, which must be located in Luxembourg, or central account holder, or with one or more institutions that act as intermediaries of the clearing entity or of central account holder.

The law allows issuers to issue dematerialised securities or convert existing securities into dematerialised ones.

Issuance of dematerialised securities

To issue equity securities in dematerialised form, a Luxembourg company or fund must meet the various prior requirements. It must amend its articles of incorporation or management regulations expressly to allow the issuance of securities in dematerialised form and to set out the applicable rules.

The company must take the necessary steps to register the complete issue of dematerialised securities of the same type with a single clearing entity or a central account holder, and publish in a Luxembourg national newspaper and on its website - if it has one - the name and the address of the clearing entity or central account holder.

Each issuer registered with Luxembourg's Trade and Companies...