The Swiss financial market regulator has green-lit local bourse SIX Digital Exchange (SDX) to operate a digital central securities depository (CSD) and exchange - the first such approval it has granted.
The Swiss Financial Market Supervisory Authority (Finma) announced on Friday 10 September that it had issued two approvals to operate financial market infrastructures based on distributed ledger technology (DLT).
“This is the first time that a licence has been issued in the Swiss financial centre for infrastructures that facilitate the trading of digital securities in the form of tokens and their integrated settlement,” Finma said, announcing the move.
First planned in 2018
According to the Bank for International Settlements a CSD is a “vital piece of financial infrastructure”, which provides securities accounts, central safekeeping services and asset services.
SDX first set out a plan to build a fully integrated trading, settlement, and custody infrastructure based on distributed ledger technology for digital assets in 2018.
“This milestone has now been reached with the approval of both licenses and paves the way for the next stage in the development of a future ecosystem,” SDX said in a statement on Friday.
SIX plans to unlock global digital liquidity
In its statement the bourse said that SDX intended to engage in “cooperative ventures” with both local and international digital finance firms.
“As this international customer base expands to include banks, issuers, insurance firms, institutional investors, the members of SDX will create a global exchange network for digital assets, unlocking global liquidity based on DLT”.
Authorities globally have been casting a close eye on digital exchanges with Binance in particular, coming under fire from a number of securities regulators over the issue of obtaining licences to operate in their jurisdictions.
"Important milestone" for institutional investors
Thomas Zeeb, member of the executive board at SDX said regulatory approvals were a significant development for the Swiss exchange and the broader digital asset market.
“This is an important milestone in providing institutional investors with a safe and robust infrastructure meeting all of the core requirements of a traditional exchange and CSD infrastructure. In this regard, the SDX approval process has proven to be an invaluable experience for SIX and for the industry as a whole.”
At the time of writing SDX had not replied to an enquiry from Capital.com about when the new approved digital infrastructure will come online.