On 29 July 2022, the Austrian Financial Market Authority (FMA) approved the capital market prospectus of SIDO Immobilien GmbH for the public offering of up to EUR 20 million of tokenized profit participation rights. SIDO Immobilien is an Austrian company active in the construction and operation of real estate.
What is a Security Token Offering?
A security token offering (STO) combines the classic world of the capital market with blockchain technology. In traditional capital market offerings, an issuer offers its securities to interested investors for subscription. Such transactions usually involve a large number of players. In STOs, an issuer also offers its securities to interested investors for subscription. What is special about this is the use of blockchain technology to handle the issue and also the tasks that arise later. Instead of physical paper certificates, tokens are used that allow the rights to be clearly assigned to specific individuals.
The buzzword here is tokenization. By using the blockchain, rights that would otherwise be embodied in a physical document can be represented in a token on a blockchain. If rights such as the right to interest payment or repayment of borrowed capital are tokenized, the tokens become transferable securities within the meaning of MiFID II. The transfer of the token from one investor to another causes the transfer of the tokenized right.
With an approved capital market prospectus, an issuer can offer its securities to the public and advertise the offering. In addition, a prospectus can be notified to other member states to potentially give issuers access to the entire EU capital market.
About the SIDO Real Estate Project
The tokenized securities offered by SIDO Immobilen GmbH, the SID Tokens, are tokenized profit participation rights. Technically, the issue is processed via the Ethereum blockchain, with the SID Tokens issued in the course of the issue complying with the ERC20 standard. Subscription will be possible from 1 August 2022. The offering will take place in Austria on the basis of the approved capital market prospectus, which is available on the website of SIDO Immobilien GmbH.
The Law Firm Behind the Project
Oliver Völkel, founding partner at STADLER VÖLKEL structured the issue: "With this project we were able to support an innovative capital market financing in the real estate sector. We are particularly pleased that we were once again able to gain recognition with our deep understanding of new technologies and our comprehensive expertise at the intersection of technology, law and business".
About STADLER VÖLKEL
The law firm STADLER VÖLKEL specializes, inter alia, in capital markets law as well as virtual currencies and crypto assets. The firm advises renowned Austrian and international companies, service providers in relation to virtual currencies as well as banks on legal issues related to blockchain technology.
STADLER VÖLKEL is actively engaged in increasing the acceptance of blockchain technology. For example, the law firm regularly records discussions in which the technology is considered from various legal, tax and technical perspectives, regularly publishes academic articles on relevant topics, has published the legal handbook "Blockchain rules" and organizes teaching events at the University of Vienna Law School (Juridicum).
In the past, the firm has already assumed a pioneering role in the field of capital markets and crypto law on several occasions. For example, STADLER VÖLKEL successfully handled the first EU-wide offering of security tokens subject to a prospectus.