Baker McKenzie advised UBS AG ("UBS") on a transnational digital securities issuance using the distributed ledger technology (DLT). The USD 50,000,000 fixed rate digital securities were placed in Singapore and Hong Kong and issued and settled on 15 December 2022.

The transaction is an issue of uncertificated securities on chain which are constituted under English and Swiss law and tokenized on a permissioned Ethereum-based blockchain. The digital securities are tokens, with each token representing one digital security in the form of a ledger-based security. The digital securities are intended to be immobilized with UBS Switzerland AG as custodian and issued to investors in the form of intermediated securities. 

The transaction represents one of the first transnational issuances of DLT-based securities by a financial institution and is part of the ongoing digital transformation of the capital markets landscape.

Haden Henderson, a partner at Baker McKenzie in London, commented, "It was great to work with the UBS team on this cutting-edge transaction. It combines the certainty of the English courts in international securities offerings and the Swiss regulatory framework for inscribing uncertificated securities on-chain. This is a complex multi-jurisdictional transaction which is in our sweet spot — showcasing our tech, regulatory and capital markets expertise across the UK, Europe and Asia."

Yves Mauchle, a senior associate at Baker McKenzie Switzerland in Zurich, added "This transaction is one of the first truly transnational applications of the new Swiss ledger-based securities framework for financial instruments. It shows that the potential of the DLT goes far beyond the cryptocurrency markets and we are excited to have completed another innovative transaction with UBS."

Stephanie Magnus, a principal at member firm Baker McKenzie Wong & Leow in Singapore, added "The transparent regulatory framework in Switzerland, Singapore and Hong Kong provides the excellent launchpad for our client to execute this milestone transaction. This innovative transaction clearly demonstrates how blockchain technology will shape the future of securities offering. We are very pleased that we are able to leverage our strong fintech and capital markets experience, having acted on many first-to-market transactions, and bring this deal to fruition for our client." 

Baker McKenzie advised UBS on all legal and regulatory aspects of the project. The team was led by Haden Henderson, Sarah Smith (both partners, London), Stephanie Magnus (Principal, Singapore) Yves Mauchle (senior associate, Zurich) and Ying Yi Liew (Local Principal, Singapore). They were supported by James Tanner (senior associate, London), Henry Gee (associate, London), Karen Man (partner, Hong Kong), Samantha Lai (counsel, Hong Kong), Jonathan Wai (associate, Singapore), Jan Lusti (associate, Zurich) and Victoria Brammer (trainee lawyer, Zurich) as well as further colleagues from various Baker McKenzie offices.

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