ICMA responds to HM Treasury's consultation on a UK Digital Securities Sandbox


22 August 2023, ICMA submitted its response to HM Treasury’s consultation on a UK Digital Securities Sandbox. ICMA’s response reflects the views of a subset of its DLT Bonds Working Group, notably issuers, banks, investors, market infrastructures and law firms across the international debt capital markets.

Key points: 

  • ICMA welcomes HMT’s proposal for a Digital Securities Sandbox to support innovation in capital markets.
  • A flexible approach for issuance and trading volumes of DLT-based securities is welcome, however, the methodology and process for applying limits needs to be transparent.
  • Further guidance on settlement assets, notably tokenised commercial bank deposits, will be required in the absence of wholesale CBDC or compatible central bank money arrangements.
  • Further clarification of the term "digitally native securities" would be helpful to make it clear that such securities may be in traditional registered form, digital bearer form and digital claim form as discussed in the UK Jurisdiction Taskforce’s legal statement on digital securities.
  • Members welcome HMT’s approach to make permanent changes to the UK legislative framework, which should take into consideration recommendations made in the Law Commission’s final report on Digital Assets as and when appropriate.
  • Common standards, notably ICMA’s Bond Data Taxonomy and the Common Domain Model (CDM), play a critical role to enable interoperability and facilitate reporting across different jurisdictions.

ICMA's detailed response can be found here.

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