What happened
- Specific facts/numbers: DNB and the AFM said Dutch law does not currently support the issuance of natively digital securities, even though tokenization itself is possible; under the current setup, a Dutch DLT venue wanting to issue such securities would need to rely on another EU member state’s law and passporting for securities depositories.
- Institutions involved: The main institutions are De Nederlandsche Bank (DNB), the Dutch Authority for the Financial Markets (AFM), the European Commission, and EU market infrastructure frameworks including the DLT Pilot Regime; the article also references Germany, Luxembourg, France and the UK as jurisdictions that have moved ahead with legal changes or sandbox approaches.
- Regulatory/technical context: The regulators’ paper says the EU DLT Pilot Regime does not fix the core issue because exemptions from market-infrastructure rules do not determine a token’s legal status under national law. They point to the European Commission’s proposed optional pan-European '28th regime' as a possible longer-term route for corporate securities issuance, while warning it could add another legal layer unless it is comprehensive.
- What to watch next: Watch for a joint follow-up by the Dutch government, supervisors and market participants on changing the Dutch legal framework and aligning with EU initiatives; beyond that, no specific legislative milestone or implementation date was identified in the text reviewed.
Why it matters
If Dutch law is not updated, tokenized securities activity may migrate to jurisdictions with clearer legal recognition, weakening the Netherlands’ competitiveness in digital capital markets.
HKMA Relevance
Direct: Another central bank and market regulator are calling for a concrete legal change in tokenised securities and market infrastructure, an action squarely within HKMA-relevant policy territory for tokenisation and financial-market plumbing.