Today FINMA announced it has granted Swiss stock exchange SIX two licenses, clearing the way for the SIX Digital Exchange (SDX) launch. SDX is an integrated trading, settlement and custody infrastructure for digital assets.
SIX emphasized that it intends to work with partners to create a global ecosystem to ‘unlock global liquidity’. Last year it announced a collaboration with SBI for a digital assets exchange in Singapore. SBI is also planning a digital asset exchange in Japan.
SDX Trading AG has a license to operate as a stock exchange, and SIX Digital Exchange AG is regulated as a central securities depository (CSD).
The SDX licenses are ‘traditional’ in the sense that all participants in the SDX will be financial institutions. In August, new Swiss legislation came into force allowing for simpler licensing for distributed ledger (DLT) based trading that is not restricted to institutions. But that’s not how SDX is licensed.
SIX started working on the venture in 2018 and launched a prototype using R3’s enterprise blockchain Corda in 2019. In August that year, SIX CEO Jos Dijsselhof shared plans to tokenize Nestle and Novartis shares on SDX, but the laws at that time needed to be updated. It was also revealed that SDX was working with Citibank, JP Morgan and Credit Suisse.
“The digitalization of financial markets continues apace, and while the final shape of the market is still evolving, 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,” said Thomas Zeeb, Global Head, Exchanges & Member Executive Board, SIX.
“This is an important milestone in bringing the digitalization of capital markets into the mainstream, but it is only the beginning. We will continue to work with our clients, regulators, and other stakeholders to shape the markets of the future.”
Last month SDX announced it had a new leader, David Newns who joins from State Street. Newns is SDX’s third leader. It’s first head, Martin Halblaub, left in 2019 over strategic differences, apparently because SDX would not be a separate legal entity. However, based on the licenses it appears it now is. Its second leader Tim Grant departed in August to join Galaxy Digital.