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    17-04-2019

     

    Eversheds Sutherland advises 20|30 Limited on first use of blockchain technology to settle an equity issuance

    Eversheds Sutherland has acted as corporate and financial regulatory adviser to 20|30 Limited (20|30), on the first-ever settlement of privately offered equity using blockchain technology in the European Union.

    20|30, a UK company building blockchain-based solutions for corporate equity issuance, has arranged the primary distribution and custody of tokenised equity as a participant in Cohort Four of UK Financial Conduct Authority’s “Sandbox”, in collaboration with London Stock Exchange Group’s (LSEG) Turquoise platform and Nivaura.

    The Eversheds Sutherland multi-jurisdictional team was led by Partner Andrew Henderson, assisted by Associate James Burnie (financial institutions). The wider team included Partners Simon Gamlin (commercial contracts), Ben Jones (tax), Rachel Broquard (company and commercial), Jake Mcquitty (financial services), Senior Associates James Bridges (company and commercial) and David Cook (financial services), and Associates Nal Townley (commercial contracts), Shibani Kapur (financial services), and Rebecca Sherry (data protection).

    Lawyers from the global legal practice’s German, Luxembourg, Swiss and United States offices also provided advice, along with Partners Roel Valkenborgh (Belgium), McMillan LLP (Canada), Gide Loyrette Nouel (France) and Mourant Ozannes (Guernsey).

    The FCA announced 20|30’s successful admission to the Sandbox on 4 July 2018, describing 20|30’s offering as “a Distributed Ledger Technology (DLT) based platform that will allow companies to raise capital in a more efficient and streamlined way”. In addition to advice on the corporate, regulatory and securities laws aspects of the test, Eversheds Sutherland is assisting 20|30 on the Sandbox authorisation process having advised three other blockchain-based securities firms through the Sandbox process.

    Using blockchain to innovate the issuance, recording and settlement of equity securities on a blockchain via the process of tokenisation is designed to offer the benefits of simplicity and ease of use to both institutional and individual investors, and to give start-ups and other companies a more streamlined and cost-effective way to access equity investors. Investors can place orders for equity tokens, and matched orders will be cleared and settled, on the blockchain using tokens which have been built using standard ERC20 and a structure that enables compliance with key regulatory requirements, for example through using investor whitelists.

    Andrew Henderson commented:

     “We are very excited to be involved with 20|30 in a project that has the potential to transform the manner in which companies raise capital.

    “This project demonstrates the Eversheds Sutherland team’s ability to tackle existing law and regulation to come up with principled, yet practical solutions to exploit potentially revolutionary new technologies which have the potential to transform financial markets. It has also been fantastic to develop a close and trusted relationship with the 20|30 team and to have helped make the 20|30 vision a reality.”

    Tomer Sofinzon, Founder & CEO of 20|30, commented:

     “We have succeeded in what we hope is the first step in reinventing capital markets. By tokenising our own equity at 20|30 through TokenFactory, we can demonstrate that there is a far better way to unlock the value of equity, built on innovative blockchain technology which will transform the way companies raise capital.”

    Jack Thornborough, Head of Compliance of 20|30, added:

     “We are delighted to announce that for the first time an equity token offering has harnessed blockchain to effect settlement in collaboration with a major stock exchange. We are pleased to have achieved this with the excellent service from Eversheds Sutherland and we are delighted to have them as our global trusted advisor.”

     

    Disclaimer

    This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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