GEN A2.1.1 Guidance
1. A Token is defined in GLO as a cryptographically secured digital representation of value, rights or obligations, which may be issued, transferred and stored electronically, using DLT or other similar technology.
2. GEN Rules A2.1.1(2)(b) and (c) specify when a Token will be an Investment. A Token that is an Investment may be either a Security or a Derivative and will be treated under the Rules as being the particular type or particular types of Security or Derivative to which it is substantially similar in nature. A Token that is an Investment is defined in these Rules as an Investment Token.
3. An Investment Token that is the same as, or substantially similar in nature, purpose or effect to, a Share, Debenture, Warrant, Certificate, Unit or Structured Product is defined in GLO as a “Security Token”. An Investment Token that is the same as, or substantially similar in nature, purpose or effect to, an Option or a Future is defined in GLO as a “Derivative Token”.
4. GEN App 6 sets out further Guidance relating to whether a particular Token is an Investment Token.
5. An example of the application of GEN Rule A2.1.1(4) is GEN Rule A2.1.2(2), where a
Derivative is treated as a Security for the purposes of the requirements in PIB.