On 22 April 2024, the Austrian Financial Market Authority (FMA) approved the capital market prospectus of Rocksolid Estate AG for the public offering of tokenized profit participation rights. Rocksolid is an Austrian company that acquires and manages commercial real estate and invests in the expansion of renewable energies in Austria.
What is a security token offering?
A security token offering (STO) combines the traditional world of the capital market with blockchain technology. In capital market offerings, an issuer offers its securities to interested investors for subscription. A large number of players are usually involved in such transactions. With STOs, an issuer also offers its securities to the public. The special feature here is the use of blockchain technology to process the issue and to perform certain tasks that arise later. Tokens are used instead of physical paper certificates, which allow rights to be clearly assigned to specific persons.
The buzzword here is tokenization. By using the blockchain, rights that would otherwise be embodied in a physical document, for example, can be represented in a token on a blockchain. If rights such as the right to interest payment or the 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 results in the transfer of the tokenized right.
With an approved capital market prospectus, an issuer can offer its securities to the public and advertise the offer. In addition, a prospectus can be notified to other member states of the European Union to give the issuer potential access to the entire EU capital market.
About the Rocksolid project
Rocksolid Estate AG invests primarily in commercial real estate and renewable energies in the EU. The tokenized securities offered by Rocksolid Estate AG, the ROC tokens, are tokenized profit participation rights. Investors have the right to monthly payments based on the conditions set out in the terms and conditions of the profit participation rights.
We supported the issuer in structuring the security. When companies active in the real estate sector raise funds, their activities are often classified as alternative investment funds (AIFs). Such products can only be sold on the market with difficulty. Together with Equito, the broker responsible for sales, we therefore paid particular attention to avoiding the qualification of the security as an AIF.
The technical implementation was carried out by the Cryptix Group, whereby the profit participation rights are technically mapped on the eCredits blockchain in accordance with the ERC 1400 standard. Further information can be found on the issuer's website.
The law firm behind the project
Oliver Völkel, founding partner at STADLER VÖLKEL, led the legal team: "The tokenization of real estate and the raising of funds by real estate companies via tokenized securities are playing an increasingly important role. We are delighted that we were able to advise Rocksolid on another exciting project in this particularly challenging regulatory environment."
Bryan Hollmann, counsel at STADLER VÖLKEL adds: "The legal structure of STOs is of crucial importance, in particular with regard to compliance with the applicable regulations for financial instruments and capital market prospectuses. We are pleased that we were able to advise Rocksolid on structuring the STO in a way that meets both regulatory requirements and investors' interests."
Rocksolid is also advised on corporate law issues on an ongoing basis by Philipp Ley, attorney at STADLER VÖLKEL.
About STADLER VÖLKEL
The law firm STADLER VÖLKEL specializes in capital markets law as well as digital assets and crypto assets. The law firm advises renowned Austrian and international companies, crypto asset service providers and banks on legal issues in connection with blockchain technology.
STADLER VÖLKEL is actively committed to increasing acceptance of the technology. The law firm regularly records discussions in which the technology is examined from various legal, tax and technical perspectives, regularly publishes academic articles on relevant topics, has published the second edition of the legal handbook "Blockchain rules" and organizes courses at the Juridicum of the University of Vienna.
In the past, the law firm has played a pioneering role in the field of capital market and crypto law on several occasions. For example, STADLER VÖLKEL successfully advised on the first EU-wide offering of security tokens requiring a prospectus.
Further information
→ Tokenization Booklet (German only)
