Security tokens platforms should come under regulator scrutiny

Security tokens are digitised versions of securities, ranging from bonds to equities, and are used by companies as well as for projects and other initiatives to raise capital. Some countries have brought in rules for exchanges that act as trading platforms, while others have left oversight to industry bodies. LONDON (Reuters) – Regulators should apply existing infrastructure rules to platforms that process security tokens to ensure market stability, the financial industry-owned group which runs the plumbing for much of the world’s trading said on Wednesday. Cryptoasset traders face risks such as the loss of assets during post-trade processing, DTCC said in a research paper, arguing that to reduce these international standards should be applied to platforms that process security tokens post-trade, and appropriately enforced. DTCC said institutional investors will not embrace cryptoassets until platforms that process security tokens have clear legal bases for material aspects of their activities, governance structures that support their operation and sound risk management systems.