Tokenising real-world assets ("RWAs") in Jersey – legal and regulatory steps to launch
27/10/2024
Tokenising real-world assets ("RWAs") in Jersey involves several regulatory requirements to ensure compliance and investor protection.
The tokenisation of real-world assets is steadily progressing globally, influencing traditional finance and investment sectors. Various assets, including real estate, fine art, commodities, securities, and intellectual property rights, are being tokenised.
Here are the key steps and considerations to launch:
- INCORPORATION: The issuer must be incorporated as a Jersey company or a Jersey limited liability company (LLC)
- ADMINISTRATION: The issuer must be administered by a trust and company service provider (TCSP) licensed by the Jersey Financial Services Commission (JFSC)
- AML/CFT COMPLIANCE: The issuer must develop and implement policies, procedures, and controls to comply with anti-money laundering (AML), countering the financing of terrorism (CFT), and countering proliferation financing (CPF) standards
- INFORMATION MEMORANDUM: An information memorandum must be prepared and submitted to the JFSC. This document should comply with the content requirements for a prospectus under the Companies (Jersey) Law 1991
- AUDIT AND VERIFICATION: All smart contracts must be audited, and the results made public. Additionally, the underlying assets (in this case, the art) must be independently verified by a qualified third-party
- DIRECTOR REQUIREMENTS: The issuer must appoint and maintain a Jersey-resident director who is also a director of the TCSP
- PROSPECTUS CONSENT: Depending on the nature of the tokens, consent to circulate a prospectus may be required under the Companies (General Provisions) (Jersey) Order 2002
These steps ensure the tokenisation process is transparent, secure, and compliant with Jersey’s regulatory framework. It’s advisable to consult with legal and regulatory experts to navigate these requirements effectively.
Source:
- https://www.walkersglobal.com/Insights/2024/10/Tokenisation-Series---How-to-Guide---Getting-regulatory-approval-to-issue-RWA-tokens-from-Jersey
- https://www.jerseyfsc.org/media/7730/tokenisation-of-real-world-assets-guidance-note.pdf.
- https://www.jerseyfsc.org/industry/guidance-and-policy/tokenisation-of-real-world-assets-rwas/.
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As well as owning and publishing Comsure's copyrighted works, Comsure wishes to use the copyright-protected works of others. To do so, Comsure is applying for exemptions in the UK copyright law. There are certain very specific situations where Comsure is permitted to do so without seeking permission from the owner. These exemptions are in the copyright sections of the Copyright, Designs and Patents Act 1988 (as amended)[www.gov.UK/government/publications/copyright-acts-and-related-laws]. Many situations allow for Comsure to apply for exemptions. These include 1] Non-commercial research and private study, 2] Criticism, review and reporting of current events, 3] the copying of works in any medium as long as the use is to illustrate a point. 4] no posting is for commercial purposes [payment]. (for a full list of exemptions, please read here www.gov.uk/guidance/exceptions-to-copyright]. Concerning the exceptions, Comsure will acknowledge the work of the source author by providing a link to the source material. Comsure claims no ownership of non-Comsure content. The non-Comsure articles posted on the Comsure website are deemed important, relevant, and newsworthy to a Comsure audience (e.g. regulated financial services and professional firms [DNFSBs]). Comsure does not wish to take any credit for the publication, and the publication can be read in full in its original form if you click the articles link that always accompanies the news item. Also, Comsure does not seek any payment for highlighting these important articles. If you want any article removed, Comsure will automatically do so on a reasonable request if you email info@comsuregroup.com.