Securities Tokenisation: Pre-Issuance Valuation of Security Tokens (DLT Act, MiFID II)

The pre-issuance valuation & token's unit price.

Introduction: tokenisation, the new frontier of financial structuring

Since the entry into force of the Swiss law on electronic securities in 2021, followed by the European DLT pilot regime in 2023, the tokenisation of financial securities has moved from the FinTech laboratory to a genuinely viable structuring option for SMEs, mid-caps and real-estate players. Yet in the vast majority of files we encounter, the tokenisation project lands on the table without a rigorous pre-issuance valuation having been carried out — even though this step governs the token pricing, the allocation to investors, the tax treatment of the operation and, above all, its commercial success.

Securities tokenisation consists of representing, on a blockchain or distributed ledger (distributed ledger technology, DLT), a financial right — a fraction of capital, a receivable, a royalty, a share of revenue — in the form of a transferable cryptographic token. In Switzerland, this operation is governed by the Federal Act on the Adaptation of Federal Law to Developments in Distributed Ledger Technology (DLT Act, in force since 1 August 2021). At the European level, because security tokens are legally financial instruments, they fall under the MiFID II directive and the Prospectus Regulation — and not under the MiCA Regulation, which expressly excludes them from its scope (Article 2(4)); the DLT pilot regime, for its part, governs the market infrastructures that trade them.

"A ledger-based security registered in a register based on distributed ledger technology may be transferred without an intermediary, provided it meets the requirements of Article 973d of the Code of Obligations." — Swiss Confederation, DLT Act, explanatory report.

The practical difficulty lies in the convergence of three simultaneous needs. On the legal front, the issuance must be structured within a framework compliant with the issuing jurisdiction (Switzerland, France, Luxembourg, Liechtenstein) and with the intended status of the token (security token subject to securities rules, utility token, hybrid). On the technological front, one must choose the blockchain (Ethereum, Polygon, Tezos, Polkadot, Swiss permissioned blockchains), define the smart contracts and their limits, and guarantee interoperability with traditional registers. On the financial front, one must rigorously assess the value of the underlying asset, determine the unit issuance price of the token, calibrate the tokenised fraction and anticipate secondary liquidity — all decisions that fall within the scope of a rigorous, technical business valuation or asset valuation.

This article reviews the legal and financial definition of securities tokenisation, its historical origin and its Swiss, European and French regulatory framework, the strategic reasons that justify using it, the complete methodology of a pre-issuance valuation, the situations in which it becomes relevant, the profile of the advisers to mobilise, two worked numerical cases, the executive's perspective, ten frequently asked questions and an operational summary.

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Definition: what is securities tokenisation?

Securities tokenisation is the operation by which an issuer represents, on a distributed ledger, a financial or patrimonial right in the form of a cryptographic token. This token, called a security token, embodies all or part of the rights attached to the underlying security: a stake in a company's capital, a bond receivable, a right to income (rent, royalty, distribution), a share of a fund or a securitisation vehicle. Its distinctive feature lies in its medium: the token is created, transferred and held on a blockchain, without recourse to traditional infrastructures (central securities depository, notarial registers, paper journals).

It is important to distinguish the tokenisation of financial securities (security token offering, STO) from the issuance of cryptocurrencies (Bitcoin, Ether) or utility tokens (tokens granting access to a service). The security token is legally a financial security that obeys the rules of company law, financial-markets law and tax law applicable in its issuing jurisdiction. It is not a speculative asset in the sense of cryptocurrencies — it is a conventional security whose technical medium is innovative.

The pre-issuance valuation is the step that determines the value of the asset underlying the token, and therefore the unit price at which the token is offered to investors. This valuation differs from a classic valuation in that it must integrate several specificities inherent to tokenisation: the tokenised fraction (often a minority share of the total asset), the anticipated secondary liquidity of the token, the discount or premium linked to the technological medium, the costs of the DLT infrastructure, and the tax implications specific to digital tokens. Without a rigorous pre-tokenisation securities valuation, the issuer exposes its project to two symmetrical risks: undervaluing and harming its existing shareholders, or overvaluing and jeopardising the subscription.

Origin: from blockchain to the DLT Act and the European framework

The concept of financial-securities tokenisation emerged in the late 2010s, in the wake of the technical maturation of blockchains and the gradual regulation of crypto-assets. The regulatory trigger came from Switzerland in 2020-2021: the Confederation published the Federal Act on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, known as the DLT Act, which entered into force in two stages in February and August 2021. This law introduces into the Code of Obligations the concept of ledger-based securities registered in a register based on distributed ledger technology (Article 973d CO), legally recognising the transferability of a security through a simple entry in a blockchain.

Switzerland was thus one of the first countries to offer a complete legal framework, from issuance through to the transfer and collateralisation of security tokens. As early as 2018, then updated in 2019, FINMA published Guidelines for enquiries regarding the regulatory framework for initial coin offerings (ICOs) that distinguish three categories of token: payment tokens, utility tokens and investment tokens (asset tokens, equivalent to security tokens). This classification is today an international reference standard.

At the European level, the MiCA Regulation (Markets in Crypto-Assets), published in June 2023 and applicable progressively since 2024, established a harmonised framework solely for crypto-assets that are not financial instruments (utility tokens, e-money tokens, asset-referenced tokens). Its Article 2(4) expressly excludes from its scope crypto-assets that are financial instruments within the meaning of MiFID II: this is precisely the case for security tokens, which therefore remain governed by the MiFID II directive and the Prospectus Regulation. ESMA confirmed this in its December 2024 guidance: the technological form of an asset does not affect its qualification as a financial instrument. In parallel, the DLT Pilot Regime Regulation (which became applicable in March 2023) allows European market infrastructures to experiment with the trading and settlement of security tokens within a regulated framework.

In France, two distinct regimes coexist and must not be confused. On the one hand, the DASP status (Digital Asset Service Provider, "PSAN" in French), introduced by the 2019 PACTE law and supervised by the AMF, covers only digital assets — utility tokens and cryptocurrencies — and by definition excludes financial securities: it therefore does not apply to security tokens. On the other hand — and this is the relevant regime for securities tokenisation — Ordinance no. 2017-1674 of 8 December 2017 and its implementing decree no. 2018-1226 of 24 December 2018 authorise the registration of financial securities in a shared electronic recording device (DEEP, the French equivalent of the DLT register). This regime is, however, reserved for financial securities within the meaning of Article L.211-1 of the Monetary and Financial Code — that is, equity securities issued by joint-stock companies (shares of an SA, SAS, SCA), debt securities (bonds) and units or shares of collective investment undertakings — not admitted to the operations of a central securities depository. As a consequence, one can tokenise the shares of a French unlisted joint-stock company, but not the membership units of an SARL, which are not legally financial securities and remain outside the device. In Luxembourg and Liechtenstein, comparable — and in some respects more permissive — frameworks have been put in place to attract European issuers.

Why tokenise: five strategic motivations

Tokenising an asset or a stake responds to five distinct motivations, which may combine depending on the project under consideration.

First, fractionalisation and broadened access. Tokenisation makes it possible to divide an indivisible asset — a building, an unlisted SME, an art portfolio, an infrastructure asset — into thousands or even millions of transferable fractions. This broadened access can open the capital to retail investors (subject to public-offering and prospectus rules) or to institutional investors who would not otherwise have access to meaningful minority stakes on the traditional private market.

Second, secondary liquidity. Security tokens can be traded on regulated crypto-asset trading platforms (DLT Pilot Regime in Europe, FINMA platforms in Switzerland), which creates secondary liquidity for traditionally illiquid assets. This liquidity remains limited today — the secondary market for security tokens is still under construction — but its rapid progress since 2023 is transforming the economic equation of holding unlisted securities.

Third, programmability. The smart contracts associated with security tokens make it possible to automate legal and operational functions: distribution of dividends, exercise of voting rights, management of shareholder agreements, payments triggered by a specific event (vesting, earn-out, buyback clauses). This programmability reduces administrative costs and accelerates the execution of operations.

Fourth, transparency and traceability. Every transaction on a security token is recorded on the blockchain and permanently auditable. For investors, this transparency improves trust; for regulators, it facilitates supervision; for issuers, it simplifies financial and tax reporting. Traceability is particularly valuable in subsequent financial due diligence operations.

Fifth, operational efficiency. The removal of intermediaries (central securities depository, transfer agent, guarantee fund for certain configurations) reduces transaction and register-keeping costs. Over a horizon of several years, these savings can on their own justify the move to a tokenised format, particularly for assets held by a large investor base.

How a pre-issuance valuation is built

The pre-issuance valuation of a security token follows a six-step methodology, each of which must be documented to meet the requirements of legal counsel, the targeted regulator and, where applicable, the issuance commissioner or the auditor.

The first step consists of qualifying the underlying asset. An SME, a piece of real estate, a portfolio of receivables, an infrastructure asset and a private-equity fund do not obey the same valuation logic. For an SME or a mid-cap, the valuation deploys the classic methods of business valuation — DCF, listed comparable multiples, precedent transaction multiples, revalued net assets. For a piece of real estate, one combines the income-capitalisation method, the direct-comparison method and, where applicable, the developer's residual method. For an infrastructure asset, the project DCF over 25 to 30 years is the dominant method.

The second step consists of defining the tokenised fraction and the legal structure of the issuance vehicle. Will 100% of the asset be tokenised, or only a share (for example 30%)? Will the tokens be issued directly on the operating company or via a dedicated holding company (SPV)? Will the issuer be Swiss (under the DLT Act), French (a joint-stock company, with registration in a DEEP under the financial-securities regime), Luxembourgish (under blockchain law) or from Liechtenstein (under the TVTG)? Each answer has consequences for the valuation, the taxation and the issuance costs. The legal structuring is generally co-piloted with a specialised law firm.

The third step consists of applying the discounts and premiums specific to tokenisation. A residual liquidity discount often applies — even though the secondary market for security tokens is progressing, it remains less liquid than a classic listed market. Conversely, a programmability or access premium may apply when the token offers specific functionalities (granular voting rights, automatic distribution). On real-estate or infrastructure assets, a technological-complexity discount remains frequent on the first issuances, decreasing as the market matures.

The fourth step consists of modelling the secondary liquidity and its impact on pricing. The token's ability to be traded on a regulated platform — its listing on the secondary market — is a central determinant of the issuance price. An issuance without a secondary outlet commands a significant discount; an issuance listed from the outset on a regulated DLT platform (BX Digital in Switzerland, platforms operating under the DLT pilot regime in France and the European Union) can be issued at levels closer to intrinsic value.

The fifth step consists of determining the unit price and the allocation. From the estimated value of the underlying asset, adjusted for discounts and premiums, one defines the number of tokens, the unit issuance price (in CHF, EUR or stablecoin depending on the jurisdiction) and the allocation across investor categories (institutional, qualified, retail subject to public-offering rules). The unit price must be low enough to allow effective fractionalisation, but high enough to limit relative transaction costs.

The sixth step consists of documenting the valuation in a report intended for your management and your licensed legal counsel, who make appropriate use of it, under their responsibility, within the framework of the operation. The report sets out the methods used, the assumptions retained, the discounts and premiums applied, the sensitivity analysis and the conclusion on the recommended issuance price. This document constitutes, in the event of subsequent dispute by an investor, a central piece of evidence.

When to use tokenisation

Tokenisation is not an end in itself. It is relevant in several specific situations where its advantages — fractionalisation, liquidity, programmability — meet a real need.

First, during a fundraising addressed to a large and fragmented investor base. An SME wishing to raise between 1 and 10 MCHF from a community of retail and qualified investors may find in tokenisation a more efficient channel than a traditional private placement, provided the issuing jurisdiction allows it and the structuring costs remain under control.

Second, when bringing a real-estate or infrastructure asset to market. The token format makes it possible to fractionalise a building worth tens of millions into units accessible to retail investors, while guaranteeing the traceability of transactions and the automation of rental-income distribution.

Third, during a family transmission or partial disposal operation. Tokenisation makes it possible to fractionalise a stake among several heirs or beneficiaries, with fine granularity and immediate traceability. Coupled with smart contracts incorporating shareholder agreements, it can secure a complex transmission — subject to the tax analysis, in particular with regard to the Dutreil Pact under French law or gift-tax rules in Switzerland.

Fourth, when creating an investment vehicle (fund, club deal, real-estate syndication). The token format simplifies the administrative management of the vehicle and smooths the entry and exit of investors on the secondary market.

Conversely, tokenisation is not relevant when the investor base is highly concentrated (disposal to a single strategic acquirer), when the issuing jurisdiction does not offer a stabilised regulatory framework, or when the structuring and infrastructure costs exceed the expected benefits — which is generally the case for issuances below 1 MCHF.

Whom to call upon

A tokenisation project mobilises four families of competencies that must be coordinated from the structuring phase onward: legal (a law firm specialised in financial-markets law and technology law), technological (a DLT platform provider, a smart-contract developer), financial (an independent valuer, a fundraising adviser) and tax (a tax firm specialised in crypto-assets and financial securities).

For the financial dimension — which includes the pre-issuance valuation and the modelling of secondary liquidity — three criteria should guide the choice of valuer. First, expertise in valuing underlying assets (company, real estate, infrastructure as the case may be). Second, a fine understanding of the specificities of tokenisation — liquidity discounts, programmability premiums, modelling of the DLT secondary market. Third, the ability to interact with the project's other advisers (lawyers, DLT providers, tax specialists) and to produce a documented report usable by your licensed legal counsel in their exchanges with the regulator.

Hectelion intervenes on pre-issuance valuations of security tokens in Switzerland and France, drawing on its dual expertise in business valuation and asset valuation, and on its operational knowledge of the Swiss DLT Act framework, MiFID II, the French DEEP regime for financial securities and the European DLT pilot regime. The firm's practice covers the qualification of the underlying asset, the deployment of classic valuation methods, the application of the discounts and premiums specific to tokenisation, the modelling of secondary liquidity and the production of the methodological report intended for your management and your licensed legal counsel.

Advantages: fractionalisation, secondary liquidity and programmability

A tokenised issuance supported by a rigorous pre-issuance valuation offers four distinctive advantages compared with classic structures. The first advantage is the broadening of the investor base: fractionalisation makes it possible to accommodate qualified retail investors and family offices that would not otherwise have access to the traditional private market, while complying with public-offering rules.

The second advantage is secondary liquidity: listing on a regulated DLT platform (BX Digital in Switzerland, DLT Pilot Regime platforms in Europe) opens a disposal channel for investors, which enhances their initial subscription and facilitates the rotation of the cap table over time. The third advantage is legal and financial programmability: smart contracts automate the distribution of income (dividends, rents, royalties), the exercise of voting rights and the implementation of shareholder agreements.

The fourth advantage is operational efficiency: the removal of intermediaries (central securities depository, transfer agent) and the automation of reporting reduce management costs over time. For an asset held over ten or fifteen years by a large investor base, the cumulative saving often justifies on its own the move to a tokenised format.

Limits: break-even threshold, market maturity and regulatory complexity

A tokenised issuance presents four operational limits to integrate from the structuring phase onward. The first limit is the total issuance cost: between legal and technological fees, the pre-issuance valuation and platform charges, the break-even threshold is generally situated between 1.5 and 2 MCHF of issuance. Below this, the traditional format remains more efficient.

The second limit is the maturity of the secondary market: despite the progress of regulated DLT platforms, liquidity remains appreciably lower than that of a classic listed security. This liquidity discount, which must be integrated into the issuance price, may limit the attractiveness of the subscription for certain categories of institutional investors accustomed to deeper markets.

The third limit is regulatory complexity in a multi-jurisdictional environment: a Swiss issuer wishing to distribute its tokens to European investors must articulate the DLT Act, MiFID II, the Prospectus Regulation, the DLT pilot regime and local public-offering rules. The fourth limit is tax uncertainty: depending on the investor's jurisdiction, the treatment of security tokens can diverge appreciably, which requires a case-by-case tax analysis and clear communication to subscribers.

The 5 mistakes to avoid

Mistake 1: Launching the project without a rigorous pre-issuance valuation

This is the most frequent mistake we observe. Founders rely on the valuation of the last fundraising round, on superficial comparables or on sector intuitions. The result is an incoherent issuance price that compromises the subscription or exposes the issuer to post-issuance litigation. The pre-issuance valuation must be conducted upstream, even before the teaser is finalised.

Mistake 2: Underestimating the total issuance costs

The cumulative legal, technological, valuation and platform costs can reach 200,000 to 500,000 CHF. An issuance below 1.5 MCHF is rarely profitable once these costs are integrated. The threshold of economic relevance for tokenisation is generally situated between 2 and 20 MCHF.

Mistake 3: Neglecting the modelling of secondary liquidity

An issuance without a structured secondary outlet commands a significant discount that can reduce the optimal issuance price by 15 to 25%. The articulation with a regulated DLT platform (BX Digital, DLT Pilot Regime platforms) must be thought through from the structuring phase, not after the primary issuance.

Mistake 4: Choosing an issuing jurisdiction for short-term tax reasons

The choice of jurisdiction (Switzerland under the DLT Act, France under the DEEP regime for financial securities, Luxembourg, Liechtenstein) governs the legal framework, the taxation, the costs and access to the secondary market for years. A decision based solely on a short-term tax advantage may, in the medium term, weaken the project.

Mistake 5: Confusing security token, utility token and stablecoin in communications

This confusion, frequent on first issuances, exposes the issuer to disputes with the regulator and to a loss of credibility with institutional investors. The security token is legally a financial security and must be communicated as such, with the transparency and rigour expected of a regulated placement.

Case 1: Tokenisation of a Vaud building, valuation 24 MCHF

A Vaud-based real-estate company owns an income property located on the Lake Geneva Riviera, valued at 24 MCHF (net rental yield 4.1%, lettable area 4,200 m², occupancy rate 96%). The owner, a founding family, wishes to sell 35% of the capital of the SPV that owns the building to a base of qualified retail and institutional investors, while retaining control and operational management.

Rather than structuring a traditional private placement — costly, illiquid, constrained by the prospectus threshold — the family opts for tokenisation under the Swiss DLT Act, with listing of the tokens on a DLT platform regulated by FINMA. The pre-issuance valuation is mandated to an independent valuer.

The methodology deployed combines three approaches. The income-capitalisation method, applied to forecast net rental income discounted at 5.3% (expected yield net of management fees), produces a value of 23.8 MCHF. The direct-comparison method, calibrated on recent transactions of comparable income properties in French-speaking Switzerland, produces a range of 23 to 25 MCHF. The DCF method over 15 years with a terminal value, discounted at a rate adjusted for rental risk (5.6%), produces a value of 24.2 MCHF.

The central value retained for the underlying asset comes out at 24 MCHF. On the 35% to be tokenised, i.e. 8.4 MCHF, the valuer applies a residual liquidity discount of 7% (the secondary market for Swiss real-estate tokens is under construction) and a programmability premium of 2% (the smart contracts automate the monthly distribution of net rents, which reduces management costs). The net tokenisable value comes out at 7.98 MCHF (8.4 MCHF × 0.95), divided into 79,800 tokens with a unit value of 100 CHF.

The issuance, conducted in two phases (institutional placement at 80%, qualified retail allocation at 20%), is oversubscribed. Six months after the issuance, the token trades on the DLT platform at 103-104 CHF, validating the coherence of the initial pricing. The founding family retains 65% of the capital and operational management; the new investors receive automated quarterly distributions via smart contract.

Case 2: Tokenisation of a stake in a French SAS, valuation 14 M€

A French SME in the cleantech sector, incorporated as a société par actions simplifiée (SAS) (revenue 11 M€, EBITDA 1.8 M€, growth of 22% per year over three years), wishes to raise around 3 M€ to finance its European expansion. The founding shareholders, present since the outset, refuse to bring in a classic private-equity fund that they consider too intrusive. They explore a raise through security tokens from a community of qualified retail investors and family offices. The corporate form is decisive here: because the company is an SAS, its shares are financial securities within the meaning of Article L.211-1 of the Monetary and Financial Code and can be registered in a shared electronic recording device (DEEP), under the regime of the 2017 ordinance and the MiFID II directive and Prospectus Regulation. The same operation would have been legally impossible with an SARL, whose membership units are not financial securities and therefore cannot be tokenised.

The independent valuer is mandated to produce the pre-issuance valuation of the stake to be tokenised (25% of the capital). The methodology combines three classic approaches of business valuation. The DCF over five years with a terminal value (perpetual growth 2.5%, adjusted WACC of 12.4%) produces a range of 13.5 to 15 M€. The listed European cleantech comparable multiples, at 8x to 10x EBITDA (i.e. 1.8 M€ × 8 and × 10), produce a range of 14.4 to 18 M€. The precedent transaction multiples in the sector, at 9x to 11x EBITDA, produce a range of 16.2 to 19.8 M€.

The central value retained is 14 M€, i.e. the weighted lower bound of the three approaches — the valuer then applies, to the tokenised fraction of 25% (i.e. 3.5 M€), a minority discount (-10%) and a residual liquidity discount (-8%) linked to the limited maturity of the secondary market for French cleantech tokens. The intrinsic value of the tokenised fraction thus comes out at 2.87 M€ (3.5 M€ × 0.82), i.e. 28,700 tokens with a unit intrinsic value of 100 € each. The SME ultimately settles on an issuance price of 105 € per token — a premium of 5% on this intrinsic value, justified by the growth profile of 22% per year and accepted by investors in light of the European expansion prospects.

The issuance is conducted over two months, with an institutional placement at 60% and an allocation to qualified French and Belgian investors at 40%. The gross amount raised reaches 3.01 M€ (28,700 × 105 €), i.e. the entirety of the initial objective of around 3 M€. The founding shareholders retain 75% of the capital, operational control and the majority on the board of directors; the new investors receive automated annual distributions and enhanced information rights via smart contract.

The executive's perspective

Securities tokenisation has, since 2024, entered a phase of operational maturity. The Swiss framework — DLT Act, FINMA Guidelines, regulated DLT platforms — is one of the most advanced in the world. The European framework, under MiFID II and the DLT pilot regime, is rapidly catching up. For SMEs, families, real-estate developers and funds, the question is no longer "is it possible?" but "is it relevant for my project?".

What we observe at Hectelion: too many tokenisation projects launch without a rigorous pre-issuance valuation. Founders rely on the valuations of the last round, on superficial comparables or on sector intuitions. The result: incoherent issuance prices, subscriptions that collapse, post-issuance disputes with the first investors.

Our conviction is that a rigorous pre-issuance valuation — one that integrates the classic valuation of the asset, the discounts and premiums specific to the token and the modelling of secondary liquidity — is not an additional formality. It is the first condition for the commercial success of a security token issuance. Done upstream, it structures the entire project; done downstream, it serves only to record the damage.

Aristide Ruot, Ph.D — Founder & CEO, Hectelion SA

FAQ: the 10 essential questions on securities tokenisation

Introduction: what to keep in mind before the questions

Securities tokenisation raises questions that intersect financial-markets law, blockchain technology, taxation and financial valuation. This FAQ brings together the ten most frequent questions from executives, founders and family offices facing a security token offering project. The answers below synthesise the Swiss DLT Act framework, MiFID II and the French DEEP regime for financial securities as at 2026 — each project calls for an individual scoping involving lawyers, technologists, tax specialists and valuers.

Q1: What is the difference between a security token, a utility token and a stablecoin?

A security token represents a financial right (capital, receivable, income) and obeys the rules of financial-securities law. A utility token grants access to a service or a product and is not, in principle, a financial security. A stablecoin is a crypto-asset whose value is backed by a reference asset (fiat currency, basket of assets, commodities) and obeys, in Europe, a specific regime under MiCA. This article focuses exclusively on security tokens and the pre-issuance valuation applicable to them.

Q2: What is the Swiss legal framework for tokenisation?

Tokenisation in Switzerland is governed by the DLT Act (in force since 1 August 2021 for the securities aspect), which introduces into the Code of Obligations the ledger-based securities registered in a register based on distributed ledger technology (Article 973d CO). FINMA publishes specific Guidelines for ICOs and the issuance of security tokens. DLT trading platforms (such as BX Digital) operate under a FINMA licence.

Q3: And at the European level?

The MiCA Regulation (applicable progressively since 2024) governs only crypto-assets that are not financial instruments; its Article 2(4) expressly excludes security tokens, which are financial instruments. The framework applicable to security tokens therefore remains that of the MiFID II directive and the Prospectus Regulation, with the DLT Pilot Regime Regulation (March 2023) additionally allowing European market infrastructures to experiment with the trading and settlement of these securities. In France, care must be taken not to confuse two regimes: the DASP status concerns only digital assets (utility tokens, cryptocurrencies) and excludes security tokens; the latter, as financial securities, fall under the Monetary and Financial Code and can be registered in a DEEP (the French equivalent of the DLT register) when they are issued by a joint-stock company (SA, SAS) — to the exclusion of SARL units.

Q4: Which assets can be tokenised?

In practice, almost all financial or patrimonial assets can be tokenised: stakes in an SME or a mid-cap, units of investment funds, bond receivables, real-estate assets (via an SPV), infrastructure assets, trade receivables, intellectual-property rights generating royalties. A legal caveat applies, however, in France: the tokenisation of equity securities there is reserved for joint-stock companies (SA, SAS), whose shares are financial securities; SARL units, which are not, cannot be registered in a DEEP or tokenised. Relevance then depends on the targeted investor base, the achievable secondary liquidity and the structuring costs.

Q5: Why is a pre-issuance valuation critical?

Because it determines the unit issuance price of the token, the allocation across investor categories, the tax treatment of the operation and, ultimately, the probability of effective subscription. An incorrect valuation produces two types of error: undervaluing and harming existing shareholders; overvaluing and jeopardising the subscription. In both cases, the tokenisation project may fail commercially and expose the issuer to post-issuance litigation.

Q6: Which valuation methods for the underlying asset?

For an SME or a mid-cap: DCF, listed multiples, transaction multiples, adjusted NAV — the classic combinations of business valuation. For a building: income capitalisation, direct comparison, developer's residual method. For an infrastructure asset: project DCF over the asset's life. The methods are the same as for a traditional issuance; what changes are the discounts and premiums specific to the token format.

Q7: How much does it cost to structure a tokenised issuance?

The total cost of an issuance comprises legal fees (50,000 CHF to 200,000 CHF), the technological costs of the DLT platform and smart contracts (30,000 CHF to 150,000 CHF), the pre-issuance valuation (15,000 CHF to 80,000 CHF) and the fees of the secondary trading platform. An issuance below 1 MCHF is rarely profitable once these costs are cumulated. An issuance between 2 and 20 MCHF is the segment in which the economics of tokenisation are built.

Q8: What is the tax treatment applicable to security tokens?

The taxation depends on the issuing jurisdiction and the investor's tax residence. In Switzerland, security tokens are, as a general rule, treated as conventional financial securities — the applicable taxation is that of the underlying asset (capital income, private capital gains in principle untaxed for the Swiss individual). In France, security tokens representing financial securities obey the rules of the Monetary and Financial Code and the General Tax Code. A case-by-case tax analysis is indispensable.

Q9: Is the secondary market for security tokens liquid?

Not yet, but it is progressing rapidly. In Switzerland, BX Digital (a DLT platform licensed by FINMA since 2024) constitutes a secondary market under construction. In Europe, several platforms operating under the DLT Pilot Regime are developing their volume. Liquidity remains, at this stage, appreciably lower than that of a classic listed security, which justifies a liquidity discount in the pre-issuance valuation. This discount should gradually decrease as the market matures.

Q10: Does Hectelion intervene on pre-issuance valuations?

Yes. Hectelion produces pre-issuance valuations for security tokens in Switzerland (DLT Act framework) and France (registration in a DEEP of financial securities issued by joint-stock companies), covering underlying assets of the SME, mid-cap, real-estate and infrastructure type. Our practice combines the classic methods of business and asset valuation, the discounts and premiums specific to tokenisation, and the modelling of secondary liquidity. Let's talk for 30 minutes in confidence to scope your project.

Conclusion: structuring a credible and investable tokenised issuance

Securities tokenisation has moved, since 2021 in Switzerland and 2024 in Europe, from a FinTech promise to an operationally available structuring option. The Swiss framework — DLT Act, FINMA Guidelines, regulated DLT platforms — is today one of the most advanced in the world. The European framework, under MiFID II and the DLT pilot regime, is rapidly catching up. For SMEs, mid-caps, real-estate players, family offices and funds, tokenisation represents an issuance channel and a holding format that can, in certain configurations, outperform traditional structures in terms of cost, liquidity and programmability.

The main challenge is no longer legal or technological — these aspects are today mastered by specialised advisers. The challenge is financial: determining the fair value of the underlying asset, calibrating the tokenised fraction, applying the relevant discounts and premiums and modelling secondary liquidity to set a coherent issuance price. Without a rigorous pre-issuance valuation, a tokenisation project cannot succeed commercially. With it, the issuer has a defensible quantified basis that structures the entire operation, from subscription to the secondary market. Hectelion SA intervenes on this perimeter in Switzerland and France, with a methodology aligned with IVSC standards and an operational knowledge of the applicable regulatory frameworks.

Article summary

Securities tokenisation is the operation by which an issuer represents a financial right (stake, receivable, income, share of a vehicle) in the form of a security token registered in a distributed ledger. The Swiss framework, structured by the DLT Act since 2021 and the FINMA Guidelines, is one of the most complete in the world. The European framework applicable to security tokens, under MiFID II and the DLT pilot regime, has been maturing since 2024 — MiCA, which excludes financial instruments, does not concern them. France recognises the registration of financial securities in a DEEP, reserved for joint-stock companies (SA, SAS) and excluding SARL units.

The strategic motivations for tokenisation are fractionalisation, secondary liquidity, the programmability of financial rights, transparency and operational efficiency. It is particularly relevant for fundraisings addressed to a large investor base, the bringing to market of real-estate or infrastructure assets, and the creation of investment vehicles.

The pre-issuance valuation is the critical step of the project. It follows a six-step methodology: qualification of the underlying asset, definition of the tokenised fraction and the legal structure, application of the discounts (residual liquidity, technological complexity) and premiums (programmability, access) specific to the token format, modelling of secondary liquidity, determination of the unit price and the allocation, documentation in a methodological report intended for your management and your licensed legal counsel.

Hectelion SA intervenes on pre-issuance valuations of security tokens in Switzerland and France, with combined expertise in business, real-estate and infrastructure valuation, and an operational knowledge of the Swiss DLT Act, MiFID II, the French DEEP regime for financial securities and the European DLT pilot regime. Valuation costs typically range between 15,000 CHF and 80,000 CHF depending on the complexity of the asset and the size of the targeted issuance.