How Tokenized Participation Rights Work Under Swiss Law (the DLT Act), Explained | OwnMore

To “tokenize” a participation right means to represent a stake in an asset — equity in a company, a participation in a project, a debt claim — as a digital token on a distributed ledger (a blockchain), so that holding and transferring the stake happens on that ledger. The appeal in private markets is practical: positions that are traditionally illiquid and administratively heavy could become easier to record, transfer and service, while staying inside a regulated perimeter. But the appeal is only real if one legal question is answered cleanly.

That question is: is the token the right, or only a representation of a right held somewhere else? In a naive setup, a token is just a database entry that points at a paper share certificate or a register elsewhere — so transferring the token does not, by itself, transfer the legal right, and the two can fall out of sync. For a participation right to be genuinely “on-chain”, the law has to recognize that the entry on the ledger is the instrument, and that transferring it on the ledger transfers the right. Without that, a tokenized stake is a convenience layer over an unchanged legal reality, not a legal instrument in its own right.

Switzerland answered this directly. The Federal Act on the Adaptation of Federal Law to Developments in Distributed Ledger Technology — the “DLT Act” — is a blanket act that amended around ten federal laws rather than creating a single new statute. The core change for participation rights came in the Code of Obligations: from 1 February 2021 it introduced the ledger-based security (in German, Registerwertrecht), a new form of uncertificated security whose rights are registered in, and can only be transferred through, a securities ledger that meets defined requirements. A second phase, from August 2021, adapted financial-market laws — among them the Financial Services Act (FinSA), the Anti-Money-Laundering Act and the Financial Market Infrastructure Act, the last of which created a license category for DLT trading facilities.

The significance is that Switzerland did not invent an exotic “crypto asset” category and bolt it on. It extended its existing, well-understood law of securities to recognize a ledger entry as the instrument. A ledger-based security therefore sits in the same conceptual family as a certificated security (a paper instrument) and an ordinary uncertificated security (a book entry) — it is simply the ledger-native form. That continuity is why Swiss practitioners describe the country as offering a sound legal footing for tokenization rather than a regulatory experiment: the rules for what the instrument is, and how it moves, were placed inside the Code of Obligations the rest of Swiss commercial law already relies on.

A ledger-based security is created by agreement. The issuer and the first holders enter into a registration agreement that specifies the security is held on, and may only be transferred through, a qualifying securities ledger. That ledger must meet conditions designed to protect holders — for example, that holders (not the issuer alone) have power over their own entries, that the ledger’s integrity is protected against unauthorized change, and that holders can access the information and ledger contents concerning them. The point of these conditions is to make the ledger a trustworthy register, not merely a private spreadsheet on a blockchain.

Once it exists, the security transfers on the ledger itself, according to the ledger’s rules — and, crucially, no separate written assignment is needed for the transfer to be legally effective. This is the heart of the reform: the on-ledger transfer is the legal transfer. For a private-market participation, that means a stake can change hands with the legal certainty of a securities transfer, while the record of the move lives on the ledger. It also means the discipline matters: because the ledger entry is the instrument, the integrity and governance of that ledger — who can write to it, how it is secured, how holders are protected — are not technical footnotes but legal essentials.

It is easy to over-read tokenization. What it can change is the plumbing: how a participation is recorded, how it is transferred, and how its servicing (registers, corporate actions, distributions) is automated. In a private market historically run on paper and signatures, that is a meaningful efficiency, and it can make a traditionally illiquid stake easier to hold and to move within the regulated perimeter. The DLT Act is what lets this happen on a sound legal basis rather than in a grey zone.

What tokenization does not change is the substance. The token does not improve the underlying asset, alter the risk of the investment, or create a return. Liquidity is not guaranteed by tokenization — a stake is only as tradable as there is a venue and a counterparty for it. Investor-eligibility rules still apply: a tokenized private-market participation is still a non-public offering that may only lawfully reach professional, institutional or opted-out qualified investors, and KYC/AML obligations are unchanged (the DLT Act explicitly adapted, rather than relaxed, the anti-money-laundering frame). Tokenization changes how a right is held and moved; it does not change who may hold it or whether it is a good investment.

OwnMore is self-directed private-market investment infrastructure, built for this Swiss legal frame. Where an instrument is tokenized, the DLT Act is the legal basis, and custody is designed to sit with a FINMA-supervised Swiss custodian as that integration onboards — the platform does not invent a parallel legal regime, it operationalizes the recognized one. The execution path is the same whether an instrument is certificated, uncertificated or ledger-based: eligibility and onboarding first, then a structured presentation, signing, settlement and custody, with every material action sealed into an append-only SHA-256 audit chain. The audit chain that records the investor’s actions is a separate mechanism from any securities ledger on which a ledger-based instrument might live; one evidences what the investor did, the other is the instrument’s own register.

A necessary clarification, in plain terms: OwnMore is pre-launch infrastructure and describes tokenization as a capability within the Swiss legal frame, not as a claim about issued tokens, volumes or returns. OwnMore publishes no assets under management, no performance and no track record, and none should be inferred. To place the entity precisely: OwnMore is Swiss private-market investment infrastructure, operated by BloomDigital GmbH in Switzerland — a financial-infrastructure company, with no connection to any nutrition, wellness, supplement or multi-level-marketing brand of similar name. This article is educational and descriptive; the DLT Act and securities law are matters of Swiss law, and for your own situation you should consult qualified Swiss legal counsel and the primary sources.