On 10 June 2021, the Electronic Securities Act (Gesetz über elektronische Wertpapiere – eWpG) came into force. With the introduction of the eWpG, Germany has further opened up its securities laws for digital securities and bearer bonds (Inhaberschuldverschreibungen) and certain fund units (Fondsanteile) may now be issued as electronic securities. When issuing such electronic securities, the eWpG foresees clearing and administration via electronic securities registers (Elektronische Wertpapierregister) which are in the form of central registers (Zentralregister) as well as crypto registers (Kryptowertpapierregister).
Whilst a central register may only be maintained by a regulated central securities depositary (Wertpapiersammelbank) or a credit institution licensed as a depositary (Verwahrer), crypto registers may be maintained by registrars having the respective licence as a financial services provider.
The eWpG does not yet set out detailed technical requirements for the maintenance of the electronic securities registers. Instead it authorises the Federal Ministry of Finance (Bundesministerium der Finanzen – BMF) and the Federal Ministry of Justice and Consumer Protection (Bundesministerium der Justiz und für Verbraucherschutz – BMJV) to issue an ordinance clarifying the relevant requirements.
Hence, BMF and BMJV have recently published a draft Ordinance on Requirements for Electronic Securities Register (Entwurf zu einer Verordnung über Anforderungen an elektronische Wertpapierregister – eWpRV-E).
The eWpRV-E comprises of a general part, which sets out provisions for entities operating either a central register or a crypto register, and a special part on requirements more specific to the operation of crypto registers.
In this respect, the general part sets out detailed requirements on:
- documentation obligations and the definition of processes and functions of the respective register;
- requirements in relation to registration of electronic securities and holders; and
- the inspection of the register.
Furthermore, the special part focussing on the operation of crypto registers, deals with requirements on cryptographic procedures used and the granting of access to the source code on which the recording system pursuant to Sec. 4 para. 1 eWpG is based.
In the anticipation of further legal and technical developments – especially securities other than bearer bonds and fund units being included in the scope of the eWpG – the ordinance may be subject to appropriate amendments.