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Backed Assets GmbH, a company incorporated under the laws of Switzerland (“Backed Assets”, “us”, “our”, or “we”), offers services through this website (“Site”), including the purchase and/or redemption of certain tokenized assets, as further detailed in the Terms and Conditions of the Offer of Securities, attached hereto as Exhibit A (“Offering Terms”), the registration document and the securities note as detailed in this link https://www.backedassets.fi/legal-documentation (“Base Prospectus”), each dated 9 May 2023, as amended and supplemented from time to time, which form an integral part hereof (collectively, including the Site, “Services”). These Terms of Service (“Terms”) govern your access and use of the Services. Our Privacy Notice, available at www.backedassets.fi/privacy-notice (“Privacy Notice”) governs our collection, processing and transfer of any Personal Data (as such term is defined in the Privacy Notice). “You” means an individual accessing and/or using the Services, whether on its own behalf or on behalf of a legal entity/organization.
These Terms apply to the following user categories (each category a “User Category”):
Retail User, Qualified User and API User together referred to as “User(s)”.
Depending on the User Category assigned to you, the Services available to you may vary. Unless explicitly stated otherwise, these Terms apply to all User Categories equally.
Please read these Terms carefully. By continuing to use this Site you assent to these Terms. We may change these Terms from time to time, and provide you notice thereof. After such change, you will be required to assent to the amended Terms. If you do not agree to these Terms, do not continue using this Site and this Services.
If you are registering on behalf of any entity or company (“Company”), you represent that you are authorized to enter into, and bind Company to these Terms and register for the Services.
Without derogating from additional restrictions and limitation provided in these Terms, you may not do or attempt to do or facilitate a third party in doing any of the following: (1) decipher, decompile, disassemble, or reverse-engineer any of the software and/or code, if and as applicable, used to provide the Services without our prior written authorization, including framing or mirroring any part of the Services; (2) circumvent, disable, or otherwise interfere with security-related features of the Services or features that prevent or restrict use or copying of any content available through Services; (3) use the Services or content thereon in connection with any commercial endeavors in any manner, except for the purposes specifically set forth in these Terms; (4) use any robot, spider, site search or retrieval application, or any other manual or automatic device or process to retrieve, index, data-mine, or in any way reproduce or circumvent the navigational structure or presentation of the Services; (5) use or access another User’s Account without permission; (6) use the Services or content thereon in any manner not permitted by these Terms or applicable law, including all applicable export laws and regulations to (re)export the Services and/or any related materials in violation of such laws.
Backed Assets may have access to certain non-public or proprietary information of yours, including certain User Content (“Confidential Information”). Except as permitted herein, Backed Assets may not use, disseminate, or in any way disclose the Confidential Information except for purposes of providing the Services or in furtherance of the relationship of the parties hereunder or as otherwise set forth herein. Backed Assets shall treat all Confidential Information with the same degree of care as it accords to its own Confidential Information but in any event with a reasonable degree of care. Backed Assets’s obligations hereunder do not apply to any Confidential Information that: (a) was rightfully in its possession or in the public domain free of any obligation of confidence at or subsequent to the time the Confidential Information was shared with Backed Assets by you; or (b) was independently developed by Backed Assets without use of any Confidential Information. A disclosure of any Confidential Information by Backed Assets in response to a law, regulation, or governmental or judicial order will not be considered to be a breach of these Terms, provided that Backed Assets, to the extent permitted, shall notify you of such requirement.
You agree to indemnify, defend, and hold harmless Backed Assets, its affiliates, and its/their respective employees, directors, officers, subcontractors and agents from and against any and all claims, damages, or costs, losses, liabilities or expenses (including reasonable court costs, attorneys’ fees, and any administrative and/or criminal fines) that arise directly or indirectly from: (a) breach of these Terms by you or anyone using your credentials and/or computer and/or mobile device and/or Wallet (whether authorized or unauthorized); (b) your use or misuse of the Services (including any Product); © any User Content and/or your Wallet and/or Client; (d) any claim, loss or damage experienced from your use or attempted use of (or inability to use) the Services; (e) your violation of any law or regulation or any of your obligations, representations, or warranties hereunder including but not limited to breach of any privacy and/or data protection laws and regulations to which you are subject; (f) your infringement of any right of any third party; and (g) any other matter for which you are responsible hereunder or under applicable law. You may not settle or compromise such a suit without our prior written consent. We may be represented in any such suit by counsel of our own choosing at our own expense.
The Site may provide you with third-party links (including, without limitation, advertisements) to websites, applications, and services. We make no promises regarding any content, goods or services provided by such third parties and all use of third-party websites and applications is at your own risk. Additionally, we do not accept responsibility for any payments processed or submitted through third-party services or for the privacy policies of such third parties. We do not endorse any products offered by third parties and we urge our Users to exercise caution in using third-party websites or applications.
Any required notices pursuant to these Terms may be sent by registered mail or email transmission (with electronic confirmation of delivery) to the addresses of the parties hereto set out herein or provided upon registration, as applicable, and any such notice shall be deemed to have been received one (1) business day after delivery by courier, four (4) business days after delivery by registered mail and one (1) business day after email transmission and written confirmation receipt of such transmission.
These Terms shall be governed solely by the laws of Switzerland, and without regard to the United Nations Convention on the International Sales of Goods and the competent courts in the Canton of Zug shall have exclusive jurisdiction to hear any disputes arising hereunder. In the event that any provision of these Terms is held to be unenforceable, such provision shall be replaced with an enforceable provision which most closely achieves the effect of the original provision, and the remaining terms of these Terms shall remain in full force and effect. In case of any discrepancy or inconsistency between the provisions of these Terms and the Offering Terms relating to the offering of the Products (as defined in the Offering Terms), the provisions of the Offering Terms will prevail. Nothing in these Terms creates any agency, employment, joint venture, or partnership relationship between you and Backed Assets or enables you to act on behalf of Backed Assets. Except as may be expressly stated in these Terms, these Terms constitute the entire agreement between us and you pertaining to the subject matter hereof, and any and all other agreements existing between us and you relating thereto are hereby canceled. We may assign and/or transfer our rights and obligations hereunder to any third party without prior notice. You shall not assign and/or transfer any of your rights or obligations hereunder, and any assignment in violation of the foregoing shall be void. No waiver of any breach or default hereunder shall be deemed to be a waiver of any preceding or subsequent breach or default.
The Issuer, Backed Assets GmbH, may issue Products under the Base Prospectus, linked to Underlyings or Underlying Components providing exposure to a range of stocks and Indices. The following Terms and Conditions are applicable to all Products issued by the Issuer. The Terms and Conditions shall be completed by and must be read in conjunction with the respective Final Terms belonging to the relevant Product. In case of inconsistencies between the Terms and Conditions and the Final Terms, the Final Terms shall prevail.
Capitalized terms in the Terms and Conditions not defined will have the meaning set out in the relevant Base Prospectus and Final Terms. Terms defined elsewhere in the Base Prospectus form an integral part of these Terms and Conditions. A reference table of all defined terms is set out in Exhibit A1 "Definitions".
The Investors are deemed to have read and taken notice of the provisions of these Terms and Conditions and the Final Terms as well as the key elements of the Tokenization Services Agreement, Authorized Participant Agreement, the Collateral Agreement, the Securities Account Control Agreement, the Custody Agreement, the Brokerage Agreement, the Paying Account Provider Agreement, the Paying Agent Upon Realization Event Agreement and the Market Maker Agreement (if any) as described in the Securities Note and the Final Terms.
The Products issued are open-ended (i.e. without predetermined fixed maturity) Tracker Certificates tracking the value of the Underlying. However, some of the Products may have fixed maturity date, which will be encountered with a method in accordance with clause IX, IV (“Underlyings with fixed maturity date”) of the Prospectus.The Products replicate the price movement of the Underlying or the Underlying Component 1:1 (excluding any dividend or interest payments paid by the issuer of the Underlying). However, the entitlement of the Investors will be reduced and/or adjusted by the Investor Fees. The resulting value will further be adjusted by the applicable fees, tracking errors from foreign currency hedging and conversion ratios as the Underlyings or Underlying Components of the Products are traded in a Underlying Currency, which may not be the Settlement Currency. The Products do not bear interest.
The securities for each Product will be issued in the minimum investment amount(s), if applicable, and the currency specified in the Final Terms, as Ledger-Based Securities. Physical delivery of the Underlyings is excluded and Investors’ interests are settled in fiat currency and/or Cryptocurrencies in the event of a redemption or termination.
The Issuer and each holder of Products issued by the Issuer, i.e. any Investor, enter into a Registration Agreement (Registrierungsvereinbarung) according to article 973d CO based on the following provisions which (i) sets out the terms relating to the securitization of the Products in ledger-based securities according to article 973d CO under Swiss law by the Issuer, the effects, the rules of transfer and the process in case of loss of such ledger-based securities, and (ii) is part of these Terms and Conditions:
The Issuer hereby securitizes the Products in the form of cryptographic tokens as ledger-based securities (Registerwertrechte) according to article 973d CO under Swiss law that are created by the Issuer by means of a registration in the smart contract based securities ledger according to article 973d (2) CO running on a Product-DLT serving as underlying system for the ledger-based securities. The entitlement to the securitized Securities exclusively results from the Securities Ledger.
Ledger-Based Securities are exclusively exercisable via the Securities Ledger and are subject to the terms and conditions of the underlying distributed-ledger protocol (System) and this section for ledger-based securities that form the Registration Agreement.
minting:
ability to create new or additional ledger-based securities
burning:
ability to destroy ledger-based securities by erasing a balance and reducing the supply.
relay:
ability to pre approve the transfer of tokens using a signed message, which can then be used to execute the transaction via a different account, which pays the blockchain fees.
pausing:
ability to stop all transfers of tokens
updating:
ability to update the smart contract code
The Tokenizer shall exclusively execute:
The ledger-based securities are transferable by (i) any action that technically transfers the direct or indirect power of disposal over the ledger-based securities from one natural or legal person to another, and (ii) complying with this Registration Agreement and these Terms and Conditions.
The smart contract may block interactions with addresses which have been flagged as sanctioned in accordance with Sanctions Regulations (such as OFAC sanctions), which includes the ability to transfer the Issuer’s Products to and from such addresses. The Issuer will engage an independent third-party service provider, such as Chainalysis, to implement such an oracle function. The third party’s terms and conditions may apply to such service.
The registration of a security (Sicherheit) according to 973g (1)(1) CO is technically not supported by the Securities Ledger. Securities (Sicherheiten) over ledger-based securities can only be created by the transfer of the respective ledger-based securities.
The cancellation function is subject to the future extension of the burning function as described below in connection with the updating function. If and once introduced, it will function as follows:
If a beneficiary of ledger-based securities loses access (power of disposal) to the ledger-based securities, such beneficiary may demand according to article 973h CO the competent court (Zug, Einzelrichter im summarischen Verfahren) to cancel the respective ledger-based securities, provided that the beneficiary furnishes credible evidence of its original power of disposal and of the loss thereof, which is according to the Issuer’s view very challenging to achieve. The cancellation procedure according to article 982 – 986 CO applies mutatis mutandis, except that only one public notice for presentation of the security in the Swiss Official Gazette of Commerce is required, and the time limit (waiting period) is at least one month after the public notice.
Following cancellation of the respective ledger based-securities by the court, the beneficiary shall provide to the Tokenizer or to the Issuer, who then forwards to the Tokenizer (i) the court decree with a confirmation of legal validity (Rechtskraftsbescheinigung) and (ii) the address to which the replacing ledger-based securities shall be transferred. The Issuer may refuse to transfer the replacing ledger-based securities to an address and request the beneficiary to provide another address, if (i) the Issuer cannot verify the beneficial ownership of the beneficiary of such address, or (ii) such address does not (a) meet the requirements set out in this Registration Agreement and these Terms and Conditions, or (b) allow the Issuer and/or Tokenizer to fulfill its KYC duties or other obligations under applicable law.
After successfully reviewing the submitted documents, the Tokenizer of the Securities Ledger will burn the cancelled ledger-based securities and issue new ledger-based securities to the beneficiary’s address that represent the rights of the cancelled ledger-based securities.
None of the Issuer, the Investors, the Security Agent, the Custodian, the Paying Account Provider, the Paying Agent Upon Realization Event or any other person shall at any time have the right to affect or demand the conversion of Products (as Ledger-Based Securities) into, or the delivery of, individually certificated securities (“Wertpapiere”), uncertificated securities (“einfache Wertrechte”) or book-entry securities (“Bucheffekten”).
Updating
The Issuer and/or the Tokenizer on behalf of the Issuer may:
in order to:
A future update of the smart contract functionality may introduce a freezing function and/or extend the burning function, which then could only be executed by the Tokenizer if (i) the Tokenizer is compelled by a court, a regulator or other governmental authority of competent jurisdiction over the Tokenizer and/or the Issuer or laws or regulations applicable on the Tokenizer and/or the Issuer to burn, recover, freeze or unfreeze ledger-based securities, and (ii) such action (a) does not result in a violation of applicable laws by the Tokenizer and the Issuer in the jurisdiction of its incorporation; and (b) is made in compliance with the rules governing international legal and administrative assistance in the jurisdiction of its incorporation.
The Tokenizer may pause all transactions related to the ledger-based securities in case of any technological change, discovery of a vulnerability, or hack attempts, to ensure the functionality of the Securities Ledger (e.g. in case of a hard fork); such pause is limited to the time reasonably required to fulfill its purpose.
To the fullest extent permitted by applicable law: in no event will the Issuer and the Tokenizer, any affiliate of the Issuer or any of their respective past, present, and future employees, officers, directors, contractors, consultants, suppliers, vendors, service providers, subsidiaries, affiliates, agents, representatives, predecessors, successors and assigns, be liable for damages of any kind (including, but not limited to, where related to loss of revenue, income or profits, assets or investment) arising out of or in any way related to the ledger-based securities, the Securities Ledger, the system or this Registration Agreement, regardless of the form of action, whether based in contract, tort or any other legal theory (even if the party has been advised of the possibility of such damages and regardless of whether such damages were foreseeable).
The Issuer may at any time amend or substitute the Registration Agreement. The Registration Agreement forms part of these Terms and Conditions and the Issuer publishes the latest version on its website: www.backedassets.fi. The Registration Agreement is subject to the same governing law and place of jurisdiction as these Terms and Conditions.
The Investors have a primary claim to the Collateral allocated to the specific Product they are holding, and subordinated claim to the assets of the Issuer after all primary claims have been settled. The Investors take the risk of the Issuer defaulting. Therefore, the tokenized Products constitute collateralized and subordinated obligations of the Issuer and rank equally among themselves. With all other collateralized and subordinated obligations, they rank pari passu. The Products are neither insured nor guaranteed by any government or agency.
The Investors’ respectively creditors’ rights do not consist of any shareholders’ rights; thus, excluding all rights of attendance, dividend payments, other participation rights or voting rights at a general assembly of the Issuer or any issuers of Underlyings or other entities. The management of the Issuer is in the sole responsibility of the body of managers. Also as regards Investors, no additional payment obligations in the meaning of the CO apply. The Products do in particular not bear any interest.
The Investors in a Product are not entitled to any rights or claims to the Underlying or the Underlying Components, i.e. the Investors do not have any dividend, voting, pre-emption rights in offers for subscription of securities of the Underlying or any right to share in the profits of an issuer of an Underlying, or any right in any surplus in the event of liquidation, also relating to the Underlying.
The Issuer entered into a Collateral Agreement with the Investors represented by the Security Agent as direct representative (direkter Stellvertreter) and the Security Agent.
Each Product is secured under the Collateral Agreement and a Product-specific schedule. Any Underlyings serving as Collateral will be held and administered by the Issuer on one or several separate Securities Accounts for each Underlying held with the Custodian in accordance with the Custody Agreement. Purchasing and selling of fractional Underlyings and Products is possible; the total Collateral will be rounded up to the next unit of the Underlying. Any excess amount paid by the Investors is kept by the Issuer and not re-funded to the Investor.
Under the Collateral Agreement, the Issuer creates a right of lien (reguläres Pfandrecht, Forderungspfandrecht) over the Collateral in favor of (a) the Investors represented by the Security Agent acting in the name and on the account of the Investors as direct representative (direkter Stellvertreter), as well as (b) the Security Agent to secure its costs in connection with the realization of the Collateral.
By acquiring the Product, each Investor appoints the Security Agent as direct representative (direkter Stellvertreter) and can only exercise its rights under the Collateral Agreement and the Product-specific schedule through the Security Agent.
The security interest(s) created under the Collateral Agreement over the Collateral are only granted to the Investors of the Product and to the Security Agent and not to any investors of other products collateralized under the Collateral Agreement according to a different schedule. The Collateral only secures the Product and the associated realization costs.
By transferring all Products held by an Investor or if the Investor is otherwise no longer the holder of any Products, such Investor will cease to qualify as an Investor and to be a party to the Collateral Agreement and the respective schedule(s) for the Product.
The value of collateral to be maintained by the Issuer (as Collateral Provider) at any point in time is determined by and must correspond to the then current value of the Product calculated according to clause I. Product Type.
Each Investor’s claim that is created pursuant to the Collateral Agreement is irrevocable on the part of the Issuer as Collateral Provider and subject to the compulsory maturity of the Product upon a Realization Event.
The liability of the parties to the Collateral Agreement is limited to gross negligence or wilful misconduct. Neither party will bear any responsibility or liability to the other party or to third parties for any losses arising out of any delay in or interruptions of performance of their respective obligations under the Collateral Agreement due to any act of God, act of governmental authority, or act of public enemy, or due to war, the outbreak or escalation of hostilities, riot, fire, flood, civil commotion, outbreak of viruses (local, national or global epidemics and pandemics), insurrection, labour difficulty (including, without limitation, any strike, other work stoppage, or slow-down), severe or adverse weather conditions, power failure, communications line or other technological failure, or technological changes or other similar cause beyond the reasonable control of the party so affected. The Collateral Agreement is governed by Swiss law.
The Products are perpetual (“open-ended”) and have no predetermined fixed maturity.
The Issuer has the right to terminate and redeem all but not part of the outstanding securities of any Product in accordance with the procedure described in clause VI. “Issuance and Redemption” of the Terms and Conditions.
The issuance and redemption mechanism is a continuous process on every Business Day and is intended to ensure that Products have sufficient liquidity and that the price tracks the relevant Underlyings or Underlying Components.
On any Business Day, Retail Investors may subscribe via issuance only through an Authorized Participant and sell back their Products via redemption through the Issuer. On any Business Day, Professional Investors may subscribe via issuance and sell back via redemption through the Issuer. Purchasing and selling of fractional Underlyings and Products is possible, the total Collateral will be rounded up to the next unit of the Underlying. Any excess amount paid by the Investors is kept by the Issuer and not re-funded to the Investor.
The Investors have to go through a proper KYC-procedure, in particular including transaction monitoring as well as source of wealth and source of funds checks, in order to be eligible to subscribe for or redeem Products or to receive any cash settlements (including possible interest and dividend payment), according to AMLA, Sanctions Regulations and the FATF’s high-risk jurisdictions and jurisdictions under the increased monitoring list.
There is no claim of any investor against the Issuer for issuing any Product at any moment of time. The Issuance of any Product is in the full and sole discretion of the Issuer. If there are negative findings in connection with the KYC-procedure or any other material negative issues regarding the issuance, redemption or any payment transaction, the Issuer has the right to reject the issuance, redemption or payment transaction with no liability to the Investors.
The practical steps involved in the issuance of Products are as follows:
a. The Ledger-Based Securities for the Products are pre-created (but not activated) by the Tokenizer for each specific Product and transferred into a wallet held by the Tokenizer on behalf of the Issuer.
b. Investor submits purchase order to Authorized Participant or Issuer.
c. Authorized Participant forwards the purchase order to the Issuer.
d. The Investor has to go through KYC procedures, if necessary at the Issuer’s sole discretion. The Issuer has the right to reject any issuance request if there are negative findings or other material issues with the issuance.
e. The Issuer submits a creation order to the Tokenizer upon receipt of the Investor’s payment (including Investor Fees) or respective guarantee or equivalent security on the Paying Account.
f. Until the Business Day following the receipt of the Investor’s payment (including Investor Fees) or respective guarantee or equivalent security (i.e. T+2), the Issuer:
i. buys the number of Underlyings equivalent to the “Investor’s payment amount minus Investor Fees” (fractional Underlyings are possible) and transfers the Underlying to the Collateral Account with the Custodian;
ii. in case of successful purchase of the Underlying, instructs the Tokenizer to activate the pre-created Ledger-Based Securities in the amount equivalent to the purchased Underlyings and to transfer them until the latest 6:00pm CEST to the wallet specified by the Investor;
iii. in case of being unable to purchase the Underlying within the specified timeframe, cancels the purchase order and transfers back the purchase price minus a fixed fee covering the expenses of the issuer (such as. KYC) to the Investor.
There are no creation limits on the Products assuming sufficient liquidity in the capital markets in which the Underlying is purchased.
If an event occurs, which in the sole discretion of the Issuer requires a discontinuation of a Product (“Termination Event”), the Issuer has the right to terminate such Product (“Issuer Call Option”) at a date of its choice (“Termination Date”), without providing for a specific reason, by notifying the Investors at the earliest possible date, in any event no later than 30 Business Days prior to the Termination Date (“Termination Notice”). The Issuer has to notify (i) Investors having subscribed their securities directly with the Issuer by e-mail (as stated by the Investor in the KYC provided during the issuance process) or in other written form in the sole discretion of the Issuer, and (ii) any other Investors not having subscribed their securities directly with the Issuer by publication on the Issuer’s website www.backedassets.fi. The Issuer Call Option may for example (but not limited to), be exercised:
a) if the Issuer has determined and documented respectively that the Underlying of the relevant Products has permanently ceased to be liquid;
b) if compliance by the Issuer with the obligations under the Products or any transaction in respect of an Underlying of the relevant Products will become unlawful or impossible in whole or in part, in particular as a result of compliance by the Issuer with any future law, rule, regulation, judgement, order or directive of any governmental, administrative, legislative or judicial authority or power or controlling authority or of the relevant competent market authorities (“Regulatory Call”);
c) due to increased cost of Collateralization; or
d) in the event that any present or future taxes, duties or governmental charges would be imposed by any jurisdiction in which the Issuer is or becomes subject to tax as a result of any change in laws or regulations of the relevant jurisdiction;
e) in the event a major service provider stops providing its services, such as, but not limited to, brokerage services, paying account provider services, services as paying agent upon realization event, tokenization services, security agent services, securities custody services or KYC services;
f) in the event of the Product having an Underlying with a fixed maturity date and the Issuer having defined in the Final Terms to exercise the Issuer Call Option upon reaching the maturity date of the Underlying;
g) in the event that the Issuer infers that technological and/or operational risks related to the ledger-based technology being used have significantly increased.
Following a Termination Event, the securities will be subject to redemption at the redemption amount on the Termination Date. If the Issuer Call Option has been exercised due to unfavorable market conditions, including illiquidity or insolvency or distressed situations relating to an Underlying or a relevant market for the Underlying, Investors should be aware that the redemption amount may be considerably lower compared to the issue price or the last valuation of the Products before the exercise of the Issuer Call Option.
Upon exercise of the Issuer Call Option the securities of the Product so terminated will be redeemed in accordance with the procedure set forth in clause VI. v. “Settlement” of the Terms and Conditions.
Any Investor may either by itself or through its financial intermediary maintaining the relevant securities for the Investor exercise its right to require the Issuer to redeem a number of securities for any one Product by submitting a sell order (“Redemption Order”) with the Issuer, or any party acting on behalf of the Issuer (“Investor Put Option”). Such Redemption Order or Investor Put Option can be placed by the Investor at any time (“Investor Redemption Date”).
The Products shall be redeemed in accordance with the procedure set forth in clause VI. v. “Settlement” of the Terms and Conditions.
All termination and redemption of Products shall be settled as per the Termination Date or the Investor Redemption Date, as the case may be, in the Settlement Currency as cash and/or upon the sole discretion of the Issuer, optionally also in other FIAT currencies or Cryptocurrencies, in accordance with this clause (“Settlement”). Purchasing and selling of fractional Underlyings is possible; the total Collateral will be rounded up to the next unit of the Underlying. Any excess amount is kept by the Issuer and not re-funded to the Investor.
The Issuer shall determine the redemption amount to be paid by the Issuer in respect of the Product being terminated and redeemed in accordance with the formula set out in the relevant Final Terms. The redemption amount shall be no less than the smallest denomination of the respective Settlement Currency. Where no market value can be obtained, the Issuer will, to the extent permitted by applicable law, determine the fair market value of such Product as per the Termination Date or the Investor Redemption Date in its duly exercised discretion and in accordance with established market practice.
The practical steps involved in the Settlement of Products are as follows:
a. Before and subject to accepting the Investor’s Products for redemption, the Investor has to go through successfully KYC procedures, if necessary at the Issuer’s sole discretion. The Issuer has the right to reject any redemption request if there are negative findings or other material issues with the redemption.
b. The Tokenizer forwards the Redemption Order to the Issuer upon receipt of the Investor’s Products.
c. Until the second Business Day following the receipt of the Investor’s Products (i.e. T+5), the Issuer
i. Instructs the Tokenizer to de-activate the received Products by transferring them to the wallet held by the Tokenizer on behalf of the Issuer;
ii. Liquidates the Underlying in the Collateral Account in the same amount as the redeemed Products;
iii. Calculates the redemption amount to be paid out to the Investor or the Authorized Participant;
iv. Instructs the Paying Account Provider to pay out the redemption amount (minus Investor Fees) to the Investor or Authorized Participant and keeps the Investor Fees.
As defined in section 2.3.1.5, most of the Underlying or Underlying Components will be traded on exchanges, such as e.g. NASDAQ, NYSE, Xetra, Börse Frankfurt, London Stock Exchange, Swiss Stock Exchange (SIX) etc., and valuations will be made by the Issuer based on prices issued by the exchange(s) or quotation system(s) or also net asset values issued by the issuers of the Underlying and Underlying Components, all as specified in the Final Terms (so-called Reference Sources) or any successor of such Reference Sources or any substitute exchange or quotation system to which trading in the Underlying may have temporarily been relocated. Any substitute exchange or quotation system must provide comparable liquidity relative to the Underlying or Underlying Components as the original Reference Source, as determined by the Issuer.
A Market Disruption Event or Settlement Disruption Event means:
a) In relation to an Index and/or Underlying Components, the occurrence or existence of a suspension or a limitation on trading in or a limitation on market prices issued by the exchange(s) or quotation system (s) defined in the Final Terms (but for the avoidance of doubt, not merely a limitation on the hours and number of days of trading resulting from an announced change in the regular business hours of) for one or more Index constituents relevant to such Index (calculated using the last known price of such Index constituent) so that the price or value of the Product cannot be determined, announced or published or otherwise is not being made available on a Business Day relevant for the fixing, observation or valuation of the Index and/or an Underlying Component; or
b) In relation to a single Underlying, the occurrence or existence of a suspension or a limitation on trading in or a limitation on the market price issued by Reference Sources (but for the avoidance of doubt, not merely a limitation on the hours and number of days of trading resulting from an announced change in the regular business hours of the relevant Underlying exchange) for the Underlying or one or more Underlying Components so that the price or value of the Product cannot be determined, announced or published or otherwise is not being made available on a Business Day relevant for the fixing, observation or valuation of such Underlying as determined by the Issuer in its duly exercised discretion.
If the Issuer, in its discretion determines that a Market Disruption Event has occurred and is continuing on a Business Day relevant for the fixing, observation or valuation of the Index or the relevant Underlying in the case of a single Underlying or components of an Underlying then the respective Business Day relevant for the fixing, observation or valuation of the Index or the relevant Underlying in the case of a single Underlying or components of an Underlying shall be postponed until the next following Business Day on which there is no such Market Disruption Event.
If, in the sole opinion of the Issuer, a Market Disruption Event is continuing, then (i) the Business Day relevant for the fixing, observation or valuation of the Index or the relevant Underlying in case of a single Underlying or Underlying Components and (ii) the value for that Index or the relevant Underlying for such date shall be determined by the Issuer, in its duly exercised discretion and in accordance with established market practice, it being understood that for relevant Underlyings that are not affected by the Market Disruption Event the Business Day relevant for the fixing, observation or valuation of the Index or the Underlying shall continue to be the originally designated date.
If, in the sole opinion of the Issuer, a Market Disruption Event is continuing for at least 30 calendar days, the Issuer may in its sole discretion be allowed to exercise the Issuer Call Option for such Product in accordance with clause VI. iii. “Issuer Redemption (Issuer Call Option)” of the Terms and Conditions.
For the purpose of these Terms and Conditions Underlying illiquidity means, in respect of any Underlying or Underlying Components, low or no trading volume in the Underlying or the Underlying Components, the difficulty to buy and/or sell the Underlying or Underlying Components in a short period of time without its price being affected, or any comparable event that leads to an extraordinary illiquidity in any Underlying or Underlying Components, as determined by the Issuer in its sole discretion (“Underlying Illiquidity”).
In case of Underlying Illiquidity,
a) in case of being unable to purchase the Underlying within the specified timeframe in connection with the Issuance, the Issuer cancels the purchase order and transfers back the purchase price minus a fixed fee covering the expenses of the Issuer (such as KYC) to the Investor;
b) in case of being unable to sell/liquidate the Underlying in the Collateral Account in the same amount as the redeemed Products within the specified timeframe in connection with the Redemption, the Issuer
a. may calculate the relevant redemption amount based on the average execution price (less transaction costs) as it was obtained on a best effort basis, as determined by the Issuer, instead of using the originally pre-defined fixing or value of the Underlying (e.g., the official close of the respective Underlying) set out in the Final Terms.
b. May postpone the determination (fixing) and/or the payment of the relevant redemption amount accordingly by such number of Business Days necessary to account for such prevailing market conditions as determined by the Issuer.
An Adjustment Event may include, but is not limited to events of capital increases, delistings, share splits, special dividends, Underlyings reaching its fixed maturity date and any other event, which makes it impossible to determine the reference price or lead to the fact that the reference price can no longer be determined on a regular basis.
The Issuer shall, acting in a commercially reasonable manner and in accordance with established market practice and without the consent of Investors, determine whether or not at any time an Adjustment Event has occurred. Where it determines that an Adjustment Event has occurred, the Issuer will, acting in a commercially reasonable manner and in accordance with established market practice determine whether such Adjustment Event has a diluting or concentrative effect on the theoretical value of the relevant Underlying or Underlying Component and, if so, will make such adjustment as it considers appropriate in its duly exercised discretion and in accordance with established market practice.
Such adjustment could be made to the redemption amount, the relevant Underlying or Underlying Component, the number of Underlyings to which the respective Product relates, the number of Underlyings or Underlying Components, and/or any other adjustment and, in any case, any other variable relevant to the redemption, Settlement, or payment terms of the relevant Products as the Issuer determines, in its duly exercised discretion but in accordance with established market practice, to be appropriate to account for that diluting or concentrative effect. The Issuer shall further determine, in its duly exercised discretion and in accordance with established market practice, the effective date(s) of such adjustment(s).
In the event of a Fork in the blockchain used by the Issuer for the Products, the Issuer, in its sole discretion, will determine:
i. whether or not to participate in the Fork; and
ii. which of the Fork’s two resulting chains would be recognized, or if a different platform/protocol/blockchain for such purpose shall be used.
The Issuer is not obliged to assess every Fork or event resulting in a Fork or to notify the Investor of the Product of any Fork or event resulting in a Fork.
If the Issuer, acting in a commercially reasonable manner and in accordance with established market practice, upon the announcement of a relevant exchange or trading platform for the trading of an Underlying or Underlying Component that pursuant to the rules of such exchange or trading platform, the relevant Underlying or Underlying Component ceases (or will cease) to be traded or publicly quoted on the exchange for any reason and is not immediately re-traded or re-quoted on an exchange, trading platform or quotation system, then this shall be a Termination Event in the sole discretion of the Issuer. Therefore the relevant Products shall be terminated by the Issuer and the Issuer shall pay an amount which the Issuer, in its duly exercised discretion and in accordance with established market practice, determines is the fair market value.
Some Underlyings may have a fixed maturity date. In such case, the Product may be subject to one of the following models:
The Product may have the same maturity date as the Underlying; or
(a) Upon reaching the maturity date of the Underlying, the Issuer may exercise its Issuer Call Option in accordance with clause VI. iii. “Issuer Redemption (Issuer Call Option)” of the Terms and Conditions, in which case the Product will be terminated with the Termination Date being the same as the maturity date of the Underlying; or
(b) Upon reaching the maturity date of the Underlying, the Issuer may replace the Underlying with another Underlying that has similar characteristics. The replacement product will be selected by the Issuer in its sole discretion and may be subject to certain conditions or restrictions.
The Issuer will specify in the Final Terms of the Product which of these models will apply to the specific Product.
In the event that the Issuer exercises its right to replace the Underlying, the Product will continue to track the new Underlying with similar characteristics. Investors should be aware that the replacement Underlying may have different performance characteristics, fees, or other features compared to the original Underlying.
The Issuer will provide Termination Notice to Investors in the event that it intends to exercise its Issuer Call Option in accordance with clause VI. iii. “Issuer Redemption (Issuer Call Option)” of the Terms and Conditions or replace the Underlying. Investors will have the option to redeem their investment in the Product prior to the Termination Date in line with the ordinary Investor Redemption procedures in accordance with clause VI.iv “Investor Redemption (Investor Put Option)” of the Terms and Conditions. If an Investor chooses not to redeem their investment, their investment will automatically be converted to the replacement Underlying upon the day following the Termination Date.
In the case of events other than those described in clause IX. “Adjustments for Products related to any Underlying” of the Terms and Conditions, which in the sole opinion of the Issuer have an effect equivalent to that of such events, the rules described in clause IX. “Adjustments for Products related to any Underlying” of the Terms and Conditions shall apply mutatis mutandis.
The Issuer shall give notice to the Investors in accordance with clause XIX. “Notices” of the Terms and Conditions of any change to the Terms and Conditions of the Products in accordance with clause IX. “Notices of Adjustments” of the Terms and Conditions. For the avoidance of doubt, the consent of the Investors shall not be required to make any of the changes to the Products set out in clause IX. “Notices of Adjustments” of the Terms and Conditions.
This clause X. “Adjustments for Products related to an Index” of the Terms and Conditions applies only to Products linked to an Index.
In the event that the Index calculation agent or a successor, if any, substantially modifies the formula or method of calculation of an Index or in any other way materially modifies an Index in the event of, among others, changes in constituent Underlying Components or their capitalization, or in the event that the Index calculation agent (or its successor), if any, replaces an Index by a new Index to substitute that Index, the Issuer may (without the consent of the Investors):
a) either, subject to a favourable opinion of an independent expert nominated by the Index calculation agent (if appointed), replace that Index by the Index so modified or by the substitute Index (if any), multiplied, if need be, by a linking coefficient ensuring continuity in the evolution of the underlying Index. In such event, the modified Index or the substitute Index, and (if necessary) the linking coefficient and the opinion of the independent expert, will be notified to the Investors in accordance with clause XIX. “Notices” of the Terms and Conditions within 10 Business Days following the date of modification or substitution of that Index; or
b) apply the provisions of clause IX. iii. “Discontinuation of Trading on Relevant Underlying Exchange” of the Terms and Conditions.
In the case of Products related to an Index, if for any reason, on or prior to any final valuation date the Index calculation agent or a successor, if any, should cease permanently to calculate and/or announce the level of the Index and does not provide for a substitute Index, or such substitute Index cannot replace that Index, for any reason, then such event shall be a Termination Event. Therefore, the Issuer may terminate the Products by means of the Issuer Call Option and redeem the Products and pay to each Investor in respect of the securities held by it an amount representing the fair market value of such Products (the “Fair Market Value”). The Fair Market Value will be determined by the Issuer, in its duly exercised discretion and in accordance with established market practice. No other amount shall be due to the Investors by the Issuer upon redemption of the Products.
The Fair Market Value so determined will be notified to the Investors in accordance with clause XIX. “Notices” of the Terms and Conditions within 10 Business Days following the date of determination of the Fair Market Value.
The amount representing the Fair Market Value will be paid to the Investors as soon as practicable within 15 Business Days following the date of determination of the Fair Market Value.
In the case of events other than those described in clause X. “Adjustments for Products related to an Index” of the Terms and Conditions, which in the sole opinion of the Issuer have an effect equivalent to that of such events, the rules described in this clause X. “Adjustments for Products related to an Index” of the Terms and Conditions shall apply mutatis mutandis.
For the purposes of this clause XI. “Foreign Exchange Disruption” of the Terms and Conditions, a foreign exchange disruption event means the occurrence of an event that makes it impossible through legal channels for the Issuer or its affiliates to convert a currency (“Base Currency”) into a specific currency required according to this Securities Note, the Final Terms or any agreement as described in this Securities Note or the Final Terms or any other contractual agreement in connection with the Products (“Required Currency”) (“FX Disruption Event”).
If the Issuer determines that on a final valuation date an FX Disruption Event has occurred and is continuing, the date for determination of the foreign exchange rate, namely the exchange rate (determined by the Issuer in good faith and in a commercially reasonable manner) for the sale of the Base Currency against the Required Currency on the final valuation date or other date on which such exchange rate requires determination in accordance with the provisions of this clause XI. expressed as a number of units of Base Currency per unit of the Required Currency (“FX Rate”) shall be postponed until the first Business Day on which such FX Disruption Event ceases to exist and the final valuation date in respect of the Products shall be postponed to the same Business Day on which such FX Disruption Event ceases to exist.
For the avoidance of doubt, if an FX Disruption Event coincides with a Market Disruption Event, as the case may be, the provisions of this clause XI. of the Terms and Conditions shall take effect only after such postponements or adjustments have been made as a result of such Market Disruption Event in accordance with the Terms and Conditions and, notwithstanding the respective provisions of the Terms and Conditions, the Issuer’s payment obligation of the redemption amount shall continue to be postponed in accordance with the provisions of this clause XI. of the Terms and Conditions.
Each Investor shall assume and be responsible for any and all taxes, duties, fees and charges imposed on or levied against (or which could be imposed on or levied against) such Investor in any jurisdiction or by any governmental or regulatory authority.
The Issuer and the Paying Account Provider shall have the right, but not the duty, to withhold or deduct from any amounts otherwise payable to the Investor such amount as is necessary for the payment of such taxes, duties, fees and/or charges.
Investors shall not be entitled to receive amounts to compensate for any amount so withheld or deducted.
If any governmental or regulatory authority imposes on the Issuer the obligation to pay any such taxes, duties, fees and/or charges, the Investor shall promptly reimburse the Issuer.
The minimum trading lot for any one Product, if any, will be specified in the Final Terms.
The Issuer may introduce multi-currency issuance and redemption for the Products after being offered on the blockchain, provided that the clearing body and/or blockchain platform and/or Paying Account Provider supports the additional currencies.
The Issuer may appoint or exchange the respective Paying Account Provider(s) and/or Paying Agent Upon Realization Event for each Product specified in the applicable Final Terms and/or on its website, provided that there will always be at least one Paying Account Provider and at least on Paying Agent Upon Realization Event as long as the Products are offered on the blockchain. The Issuer may also appoint several Paying Account Providers, but only one Paying Agent Upon Realization Event in relation to any one Product.
The Paying Account Provider is acting solely as agent of the Issuer and does not assume any obligation or duty to, or any relationship of agency or trust for or with, the Investors.
The Paying Agent Upon Realization Event is acting upon a Realization Event solely on instruction of the Security Agent.
Any determinations, decisions and calculations by the Paying Account Providers shall (save in the case of manifest error or wilful misconduct) act as a guideline for the Issuer and the Investors.
The Issuer will carry out all calculation services required by this Securities Note, the Final Terms as well as all agreements described in this Securities Note and the Final Terms.
With regard to the calculation services, the Issuer does not act as agent for the Investors and does not assume any obligation or duty to, or any relationship of agency or trust for or with, the Investors. All calculations, decisions and determinations made by the Issuer shall (save in the case of manifest error or wilful misconduct) be final and binding on the Investors and the services providers described in this Securities Note and the Final Terms.
In this regard, the Issuer may delegate any of its obligations and functions to a third party, as it deems appropriate.
This clause XVI. “Security Agent” applies to the Security Agent or any other Security Agent specified in the applicable Final Terms or any successor Security Agent of such Security Agent.
By acquiring the Product, each investor appoints the Security Agent as direct representative (direkter Stellvertreter) and can only exercise its rights under the Collateral Agreement and the schedule for the specific Product through the Security Agent. The Issuer may at any time vary or terminate the appointment of the Security Agent only with the Security Agent’s approval and in accordance with the provisions of the Collateral Agreement and applicable law. It shall give notice to the Investors in accordance with clause XIX. “Notices” of the Terms and Conditions of any modification in the appointment of the Security Agent.
The Security Agent may, in accordance with the provisions of the Collateral Agreement, delegate any of its obligations and functions to a third party, as it deems appropriate.
Pursuant to the Collateral Agreement, the Security Agent shall be entitled to satisfy its claims against the Issuer under the Collateral Agreement (including fee claims) from the realization proceeds before any other payments are made. Should the Security Agent or third parties incur any extraordinary realization and distribution costs, the Security Agent may also deduct these additional costs from the realization proceeds, before any other payments are made to investors.
Without prejudice to the provisions of any agreement as described in this Securities Note or the Final Terms, none of the Issuer, the Authorized Participant, the Custodian, the Broker, the Security Agent, the Paying Agent Upon Realization Event or the Paying Account Providers shall have any responsibility to the extent permitted by law for any errors or omissions in the calculation of any amount or with respect to any other determination or decisions required to be made by it under this Base Prospectus or with respect to the Product, irrespective of whether the agents act in the interest of the Issuer or the Investor.
None of the Issuer, the Custodian, the Broker, the Paying Agent Upon Realization Event, the Paying Account Provider, the Authorized Participant, the Security Agent, or any other involved party with the Product shall be liable for fraud, theft, cyber-attacks, drastic changes in regulation or any analogous or similar event (an “Extraordinary Event”). Upon the occurrence of such an event with respect to, or affecting the Underlying, the redemption amount shall be reduced accordingly to such Extraordinary Event and may be as low as the smallest denomination of the Settlement Currency (i.e. USD 0.01, EUR 0.01, CHF 0.01, GBP 0.01 or the equivalent in other Settlement Currencies), as determined by the Issuer.
In no event shall the Issuer, the Custodian, the Broker, the Paying Agent Upon Realization Event, the Paying Account Provider, the Authorized Participant, the Security Agent, or any other involved party with the Product have any liability for indirect, incidental, consequential or other damages (even if it was advised of the possibility of such damages) other than (in the case of the Issuer only) interest until the date of payment on sums not paid when due in respect of any Products. Investors are entitled to damages only (if any) and are not entitled to the remedy of specific performance in respect of a Product.
The Issuer, and/or any of its affiliates may at any time purchase Products of any issue at any price in the open market or otherwise, subject to employee trading restrictions according to common standards and regulations in the financial industry. Such Products may, at the option of the Issuer, and/or, as the case may be, the relevant affiliate, be held, resold or cancelled or otherwise dealt with, subject to restrictions according to common standards and regulations in the financial industry.
Notices to Investors relating to Products offered on blockchain platforms and other secondary markets will be published on the platform’s website, on the Issuer’s website www.backedassets.fi or, in any other form as permitted by potential rules of the blockchain platform or other body. They will only be published in the English language.
Particularly, notices to Investors of the non-listed Products may also be published, as specified in the applicable Final Terms, in newspapers, on a website or otherwise. It is presumed that notices published on the website of the Issuer have been sufficiently brought to the attention and the knowledge of Investors for the purpose of these Terms and Conditions and have been understood and accepted by the Investors.
The Issuer shall be at liberty without the consent of the Investors to create and issue further securities, thereby increasing the number of securities in the market (provided that the Underlying or Underlying Components are also increased by a corresponding amount). Such securities shall have the same Terms and Conditions as the respective Product in all respects (or in all respects save for their issue date and issue price) so that such further issue shall be consolidated and form a single Product with the outstanding securities of such Product. Alternatively, the Issuer may decide to create and issue a separate Product upon such terms as the Issuer may determine at any time of their issue and as set out in the Final Terms of such separate Product. References in these Terms and Conditions to the Products include (unless the context requires otherwise) any other securities issued pursuant to this clause and either forming part of the existing Products or a separate Product.
The Issuer covenants with and undertakes to the Investors, and also for the benefit of the Security Agent, that it shall duly, unconditionally and punctually pay and discharge all monies and liabilities whatsoever which from time-to-time become due, owing or payable by the Issuer: (i) under or in respect of the Products; and (ii) under or in respect of the Collateral.
Save for any monies received upon any Realization Event, all monies received by or on behalf of the Issuer in relation to any redemption in accordance with clause VI. “Issuance and Redemption” of the Terms and Condition will be paid in the following order of priority:
A realization event regarding the Collateral occurs when (“Realization Event”):
By acquiring the Product, each Investor automatically declares to the Security Agent, as described in Art. 112 Para. 3 of the CO, that they wish to enforce their rights under the Collateral Agreement when a Realization Event occurs.
The Security Agent shall be entitled to satisfy its claims against the Issuer under the Collateral Agreement (including fee claims) from the realization proceeds before any other payments are made. Should the Security Agent or third parties incur any extraordinary realization and distribution costs, the Security Agent may also deduct these additional costs from the realization proceeds, before any other payments are made to Investors; the remaining realization proceeds shall be available for payment to the Investors of the Product (“Net Realization Proceeds”).
The Security Agent shall distribute the Net Realization Proceeds with discharging effect by instructing the Paying Agent Upon Realization Event to execute the payment of the pro-rata share of the Net Realization Proceeds to the (financial intermediaries holding the accounts for the) respective Investors. If the Product is represented in the form of ledger-based securities, the Security Agent may determine that such payment is made by the custodian(s) or any other parties or the accounts designated by the respective investors. The transfer of the pro-rata shares of the Net Realization Proceeds shall be determined by the holdings in the Product. Each Investor of the Product with reference to each Investor’s (or its financial intermediary’s) number of securities. Each Investor of a specific Product represented at all times by the Security Agent has a maximum claim against the Collateral Provider amounting to that share of the Net Realization Proceeds of the Collateral for such Product.
Payments of the Net Realization Proceeds are made exclusively in the Settlement Currency of the Product. The Security Agent or the Paying Agent Upon Realization Event (as the case may be) may request additional information from Investors or set specific requirements to comply with applicable law. The Security Agent may refuse to release and the Paying Agent Upon Realization Event may refuse to transfer any Net Realization Proceeds to the (financial intermediaries holding the accounts for the) respective Investors and the claim of the Investor lapses if the Investor (through its financial intermediary) is not providing the additional information or is not fulfilling the specific requirements within the timeline set by the Paying Agent Upon Realization Event or the Security Agent. The same applies to a Product represented as ledger-based securities, except that the Custodian(s) or the other parties designated by the Security Agent may directly request additional information from Investors (if the ledger-based securities are not held with a financial intermediary) and that the Security Agent may refuse to release and the Custodian(s) or the other parties may refuse to transfer any Net Realization Proceeds to the account designated by an Investor and the claim of such Investor lapses if the Investor is not providing the additional information or is not fulfilling the specific requirements within the timeline set by the Security Agent, the Custodian(s) or the other parties.
No interest shall be paid on the claims of the Investors or against the Issuer as Collateral Provider, which correspond to their pro-rata shares of the Net Realization Proceeds realized from the Collateral. The Security Agent shall not owe any default interest to the Investors on the payment of the pro-rata share of Net Realization Proceeds, neither shall the Security Agent be liable to the Investors for any further damages whatsoever.
The payment of pro-rata Net Realization Proceeds to the Investors under the terms of the Collateral Agreement, discharges the Investors’ claims (represented by the Security Agent) against the Issuer that are related to the Product.
Claims for payment of the redemption amount in respect of the Product shall be barred by the statute of limitation (prescription) in accordance with the applicable Swiss law, unless made within 10 years from the relevant Termination Date or the Investor Redemption Date, as the case may be.
By purchasing or subscribing of any Product(s) the Investor is deemed to consent that the Issuer is entitled at any time and without the additional consent of the investors to have itself substituted as the debtor for the Products by another unaffiliated Swiss or foreign company or by a Swiss or foreign subsidiary, branch or holding company of Backed Assets GmbH, Zug, Switzerland, (the “New Issuer”), provided that:
i. the New Issuer is a special purpose vehicle without any operational activity except of issuing the Product(s),
ii. the New Issuer assumes all liabilities owed by the existing Issuer to investors with respect to the Products, 89/107
iii. the New Issuer secures its liabilities to investors that result from the Products by means of a guarantee declaration or other appropriate measures equivalent to the collateral structure as described in the Base Prospectus and the Final Terms of the relevant Product(s),
iv. the New Issuer has filed all necessary product documentation with the competent authorities (where necessary) and such product documentation has been approved by such competent authorities (where necessary),
v. the New Issuer has entered into service agreements with all necessary service providers (e.g. custodian, broker, security agent, paying account provider), and
vi. the New Issuer has received all necessary approvals from the authorities of the country in which it has its headquarters.
Upon fulfilment of the aforementioned conditions, the New Issuer takes the place of the existing Issuer in all respects, and the existing Issuer is released from all obligations to the holders of Products relating to its function as Issuer arising from or in connection with the Products.
Any such substitution of the debtor will be promptly published or brought to the attention of investors by the Issuer in an appropriate manner. The Issuer bears no responsibility for damages or consequences incurred by individual investors as a result of the exercise of the Issuer’s right to substitute the debtor. Investors therefore have no right to assert legal claims or claims for compensation of damages against the Issuer in this connection.
Save for the approval of this Base Prospectus in relation to the FMA and the subsequent offer of the Products to the public based on the Final Terms, no action has been or will be taken by the Issuer that would permit a public offering of any Products or possession or distribution of any offering material in relation to any Products in any jurisdiction where action of that purpose is required. No offers, sales, resales, or deliveries of any Products or distribution of any offering material relating to any Products may be made in or from any jurisdiction except in circumstances which will result in compliance with any applicable laws and regulations and which will not impose any obligation on the Issuer.
This Securities Note, the Base Prospectus and the Final Terms do not constitute, and may not be used in connection with, an offer or solicitation in any place where offers or solicitations are not permitted by law. If the laws or regulation of a jurisdiction require that an offering of securities described herein be made by a licensed bank, securities firm or insurance company or any other party involved (each as defined in this Securities Note) or any affiliate of any other party is a licensed bank, securities firm or insurance company in that jurisdiction, the offering shall be deemed to be made by such other party or such affiliate on behalf of the Issuer or holders of the applicable securities in such jurisdiction.
The offering or sale of the Products in certain jurisdictions may be restricted by law including because of the Underlyings/Underlying Components.
Persons who obtain possession of this Securities Note and/or the Base Prospectus and/or the Final Terms are required to inform themselves about and to adhere to any such restrictions. Neither this Securities Note nor the Base Prospectus nor the Final Terms constitute or may be used for the purposes of, an offer or solicitation to subscribe for or to purchase any Product in any jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Accordingly, this Securities Note, the Base Prospectus and the Final Terms should not be used by anyone for this purpose.
The Products offered on primary and secondary markets and other platforms under this Base Prospectus are not for distribution to any U.S. person or any person or address in the U.S. or in any other jurisdiction (i) to which a distribution would be unlawful (e.g. being subject to Sanctions Regulations, such as residents of North Korea, Syria or Iran), or (ii) which may be classified as high-risk jurisdictions subject to a call for action according to the Financial Action Task Force (“FATF”).
The Issuer reserves the right to impose further selling restrictions at its sole discretion which will be communicated in the Final Terms or on its website: www.backedassets.fi.
In the event any clause or item in the relevant Final Terms is or becomes invalid, the validity of the remaining Terms and Conditions and items in the relevant Final Terms shall not be affected.
The Issuer shall be entitled to amend without the consent of the Investors any clause or item in the relevant Final Terms for the purpose of correcting a manifest error, or clarifying any uncertainty, or correcting or supplementing the provisions herein in such a manner as the Issuer deems necessary or desirable, provided that, in the Issuer’s sole opinion, the Investors would not incur significant financial loss as a consequence thereof.
Furthermore, the Issuer shall at all times be entitled to amend any clause or item in the relevant Final Terms where, and to the extent that the amendment is necessitated as a consequence of legislation, decisions by courts of law, or decisions taken by governmental authorities.
The Products are governed by, and shall be construed in accordance with, Swiss law (without reference to the principles of conflicts of law rules).
In relation to any proceedings in respect of the Products, the Issuer submits to the jurisdiction of the courts of the Canton of Zug.
The following is a summary where terms are defined in the Securities Note (including the Terms and Conditions).Terms not defined in this list shall have the meanings given to them elsewhere in the Terms and Conditions.
Adjustment Event
Events (excluding Market Disruption Events) that may have a diluting or other negative effect on the theoretical value of the relevant Underlyings or Underlying Components of it
AEOI
Automatic Exchange of Information
AEOI Act
Swiss Act on International Automatic Exchange of Information in Tax Matters
AG/SA
Company limited by shares
AML
Anti-money laundering
AMLA
Swiss Anti-Money Laundering Act
Attachment
Provision of security
Authorized Participant
(i) A licensed bank according to the BA, (ii) a securities firm according to the FinIA, (iii) an insurance company according to the ISA, or (iv) a non-Swiss institution being supervised in an equivalent manner, approved and engaged by the Issuer (in its absolute sole discretion) for the offering of one or several Products to Retail Investors and/or Professional Investors.
Authorized Participant Agreement
Authorized Participant entering into an Agreement with the Issuer, regulating i.e. the rights and obligations of the Authorized Participant in the context of application and redemption of Products
BA
Swiss Banking Act
Base Currency
any currency required to be converted into a Required Currency
Base Prospectus
Securities Note, Registration Document and any supplement thereto
Broker
A regulated securities broker regarding brokerage services in connection with buying/selling the Underlyings
Brokerage Agreement
Agreement between the Issuer and the Broker
Business Day
A day on which relevant clearing systems are open and securities can be settled, relevant commercial banks and Custodians are open, banks in Zurich are open, foreign exchange markets execute payments in the respective Settlement Currency and Underlyings or Underlying Components of the relevant Product can be settled, and/or any other day, as specified in the Final Terms
CHF
Swiss franc
CISA
Swiss Collective Investment Schemes Act
Classic Index
a notional portfolio of at least five different Underlying Components, whereas the composition of the Underlying Components remains unchanged during the entire term of the Product.
CO
Swiss Code of Obligations
Collateral
The assets representing the Underlying in the account of the Issuer held with the Custodian
Collateral Agreement
A collateral agreement entered between the Issuer and the Investors represented by the Security Agent acting as in their name and on their account as their direct representative (direkter Stellvertreter) and the Security Agent acting in its own name and on its own account
Collateralization
Providing the Collateral for the benefit of the Investors to secure its payment obligations under the Base Prospectus and the Final Terms
Condition
Each term and condition of the Terms and Conditions
Corp./Inc.
Corporation
Custodian
Any person administering the accounts to which the Underlyings purchased by the Issuer are credited
Custody agreement
A custody agreement between the Issuer and any Custodian according to general market standards for custody services
DAO
Decentralized Autonomous Organization
DEBA
Swiss Debt Collection and Bankruptcy Act
Delegated Regulation
Commission Delegated Regulation (EU) 2019/980 of 14 March 2019, as amended
Distributor
Any person offering, selling or recommending the Products
DLT
Distributed ledger technology
Dynamic Index
a notional portfolio of at least five different Underlying Components meeting the following conditions cumulatively so that they are merely passively managed: (i) the Underlying Components contained in the Index or basket are managed during the term of the Product according to precisely defined and predetermined objective criteria (such as market capitalization, liquidity, P/E ratio, etc.) and (ii) these criteria must be set out in the Index or basket specifications and remain un-changed during the term of the Product
EEA
European Economic Area
EmbA
Swiss Embargo Act
ETC
Ethereum Classic
ETF
Exchange-traded fund
ETH
Ethereum
EU
European Union
EUR
Euro
EUWA
European Union (Withdrawal) Act 2018
Extraordinary Event
Fraud, theft, cyber-attacks, drastic changes in regulation or any analogous or similar event
Fair Market Value
In the case of Products related to an Index, if for any reason, on or prior to any final valuation date the Index Calculation Agent or a successor, if any, should cease permanently to calculate and/or announce the level of the Index and does not provide for a substitute Index, or such substitute Index cannot replace that Index, for any reason, then the Issuer shall terminate the Products by means of the Issuer Call Option and redeem the Products and pay to each Investor in respect of the securities held by it an amount representing the fair market value of such Products
FATCA
U.S. Foreign Account Tax Compliance Act
FATF
Financial Action Task Force
Final Terms
Specification of the detailed terms applicable to each Product
Financial Report
Review Report together with the Interim Financial Statements
FinIA
Swiss Financial Institutions Act
FINMA
Swiss Financial Market Supervisory Authority
FinSA
Swiss Financial Services Act
FinSO
Swiss Financial Services Ordinance
FMA
Financial Market Authority Liechtenstein
Fork
An event in which an interlinked chain of blocks (a blockchain) is, at a certain block onwards, followed by two or more parallel and non-identical blocks, each generating a separated continuum of the original blockchain, possibly becoming the dominant version and thus obliviating all transactions recorded on the other possible chains.
FSMA
Financial Services and Markets Act 2000
FX Disruption Event
Occurrence of an event that makes it impossible through legal channels for the Issuer or its affiliates to convert a Base Currency into the Required Currency
FX Rate
The exchange rate for the sale of the Base Currency against the Required Currency
Index
any Classic Index or Dynamic Index
Interim Financial Statements
Interim financial statement for the period from 30 July 2021 (incorporation date of the Issuer) to 30 September 2021
Investor
Person (other than a financial intermediary) who wishes to invest in the Products holding the tokenized securities on the ledger platform. Such persons and financial intermediaries holding tokenized securities in such Products for their own account shall each be an Investor.
Investor Fees
Administration fees, custody fees, Index licensing fees and other fees due to providers of services in relation to the Products
Investor Put Option
Any Investor may either by itself or through its financial intermediary maintaining the relevant securities for the Investor exercise its Redemption Order with the Issuer, or any party acting on behalf of the Issuer
Investor Redemption Dates
a Redemption Order or Investor Put Option can be placed by the Investor at any time
ISA
Swiss Insurance Supervision Act
ISIN
International security identification number
Issuer
Backed Assets GmbH (Backed Assets LLC) with its registered seat in Baar, Switzerland
Issuer Call Option
Right of the Issuer to terminate a Product
IT
Information technology
KYC
Know-your-customer procedures and documentation, in particular including transaction monitoring as well as source of wealth and source of funds checks, all in accordance with AMLA and Sanctions Regulations
Ledger-Based Securities
Ledger-based securities (“Registerwertrechte”) according to Art. 973d et seqq. CO
Market Disruption Event
As defined in section 2.4.1.5.
Market Maker
Any natural or legal person that provides market making services including bid and offer of market prices for the Products, next to adequate liquidity with regard to all Products
MCAA
Multilateral Competent Authority Agreement
MiFID II
Directive 2014/65/EU, as amended
MTF
Multilateral trading facility
NASDAQ
National Association of Securities Dealers Automated Quotations
Net Realization Proceeds
The amount resulting of the deduction of the service fees and additional costs of the Security Agent from the realization proceeds
New Issuer
Any affiliate, subsidiary or holding company of the Issuer as substitution for the Issuer as obligor under the Product
Non-Exempt Offer
If the Final Terms in relation to the Products specifies that an offer of those Products may be made by the Authorized Participant(s) other than pursuant to Art. 1 Para. 4 of the Prospectus Regulation in that Relevant Member State
Notification
FMA notification to the competent authorities in France, Germany, Spain and the Netherlands in relation to this Base Prospectus consisting of the Securities Note and the Registration Document with a certificate of approval attesting that the Securities Note has been drawn up in accordance with the Prospectus Regulation and providing it with an electronic copy of this Securities Note.
NYSE
New York Stock Exchange
OECD
Organisation for Economic Co-operation and Development
Order
Financial Services and Markets Act 2000 (Financial Promotion) Order 2005
OTC
Over-the-counter
Parent
Backed Finance AG, owning 100% of the quotas of the Issuer
Paying Account Provider
Any person accepting or dispatching payments on behalf of the Issuer of the Products and by accepting or distributing the funds from/to the investors
Paying Account Provider Agreement
Agreement between the Issuer and a regulated bank or securities firm entered into which sets out the terms on which the Issuer holds the Paying Account with such regulated bank or securities firm in relation to the Products issued under the Base Prospectus.
Paying Account Provider Functions
Paying account provider functions as defined in Section 3.2 of the Securities Note
Paying Agent Agreement
A paying agent agreement entered between the Issuer and a Paying Agent Upon Realization Event
Paying Agent Upon Realization Event
Only upon a Realization Event in accordance with the Collateral Agreement, the Paying Agent Upon Realization Event is a person who initiates upon instruction of the Security Agent the payment of the pro-rata share of the net realization proceeds, i.e. third party fees being deducted from received payments, to the Investors.
Perfection
Asserting rights in the Collateral
PoS
Proof of Stake
PoW
Proof of Work
Product
The securities offered by the Issuer to Investors
Product-DLT
Ethereum blockchain and similar blockchains, such as Binance Smart Chain, polygon, Gnosis Chain, TRON, Ethereum Rollups etc.
Professional Investors
Investors according to Art. 4 Para. 3 FinSA
Prospectus Regulation
Regulation (EU) 2017/1129 of the European Parliament and the Council of 14 June 2017 (and amendments thereto)
Realization Event
As defined in clause XXII. i. “Realization Event” of the Terms and Conditions.
Redemption Order
Right of the Investors to require the Issuer to redeem a number of Securities for any one Product by submitting a sell order
Reference Sources
Market prices issued by the exchange(s) or quotation system(s) defined in the Final Terms
Registration Agreement
The Issuer and each holder of Securities issued by the Issuer, i.e. any Investor, enter into a registration agreement which sets out the terms relating to the securitization of the Products in ledger-based securities according to article 973d Swiss Code of Obligation by the Issuer, the effects, the rules of transfer and the process in case of loss of such ledger-based securities
Registration Document
Information document on the Issuer
Regulatory Call
Exercising of the Issuer Call Option if compliance by the Issuer with the obligations under the Products or any transaction in respect of an Underlying of the relevant Products will become unlawful or impossible in whole or in part, in particular as a result of compliance by the Issuer with any future law, rule, regulation, judgement, order or directive of any governmental, administrative, legislative or judicial authority or power or controlling authority or of the relevant competent market authorities
Relevant Implementation Date
With effect from and including the date on which the Prospectus Regulation is implemented in that Relevant Member State
Relevant Member State
Member State of the EEA which has implemented the Prospectus Regulation
Required Currency
A specific currency required according to this Securities Note, the Final Terms or any agreement as described in this Securities Note or the Final Terms or any other contractual agreement in connection with the Products.
Retail Investors
Investors not qualifying as Professional Investors
Review Report
Auditor’s review report of the Interim Financial Statements
Sanctions Regulations
EmbA, any other Swiss sanctions regulations, and any other sanctions regulations in the Issuer’s sole discretion
SE
Societas Europaea
Securities Account
An account maintained by a securities intermediary such as a bank, securities firm or any other regulated Custodian in Switzerland or abroad in which it holds securities for the benefit of a customer
Securities Account Control Agreement
A three-party agreement entered into in favor of the secured party, i.e. the Security Agent acting in the name and on the account of the Investors as direct representative (direkter Stellvertreter), between:
a. a customer/debtor such as the Issuer, e.g. a borrower, guarantor or other loan party pledging financial assets as Collateral; and
b. the securities intermediary maintaining the relevant financial assets in a Securities Account maintained on behalf of, and in the name of, the debtor, i.e. a depository bank respectively the Custodian; and
c. the financial intermediary acting in the name and on the account of the Investors as direct rep-resentative (direkter Stellvertreter) , e.g. the Security Agent.
Securities Act
U.S. Securities Act of 1933, as amended
Securities Ledger
Basis for the registration of Ledger-Based Securities according to Art. 973d et seqq. CO
Securities Note
Securities Note for Retail Non-Equity Securities for the issuance of tokenized securities of the Issuer
Security Agent
The Security Agent represents the Investors (direkter Stellvertreter) to secure in the name and on the account of the Investors their claims under the Products.
Settlement
All termination and redemption of Products shall be settled as per the Termination Date or the Investor Redemption Date, as the case may be, in the Settlement Currency as cash and/or upon the sole discretion of the Issuer, optionally also in other FIAT currencies or Cryptocurrencies, in accordance with this clause.
Settlement Currency
Currency in which the redemption amount is settled
SME
Small and medium-sized enterprises
SPV
Special purpose vehicle
SSPA
Swiss Structured Products Association
Structured Product(s)
Combination of conventional instruments with derivatives to create a stand-alone product that is then certificated and issued by an Issuer
Supplement
Supplements pursuant to Art. 23 of the Prospectus Regulation
Swiss Bankruptcy Official
Swiss bankruptcy official or administrator
Termination Date
Date of choice on which the Issuer terminates a Product
Termination Event
Event which in the sole discretion of the Issuer requires a discontinuation of a Product
Termination Notice
The Issuer has to notify the Investors of the termination of a Product at the earliest possible date, in any event no later than 30 Business Days prior to the Termination Date
Terms and Conditions
Terms and Conditions of the offer of securities to the Public, as stated in section 5 of this Securities Note
Tokenization Services Agreement
Agreement between the Issuer and the Parent, effective as of November 18th, 2021
Tokenizer
Person/legal entity providing tokenization services, i.e. creating the ledger-based securities for the Products, activating them and handling the issuance and redemption transactions on behalf of the Issuer
Tokenization Services
Tokenization services as defined in section 3.2 of the Securities Note
Tracker Certificates
Certificates according to type 1300 of the Swiss Derivatives Map
Underlying Currency
Currency of the Underlying/Underlying Components
Underlying Illiquidity
Low or no trading volume in the Underlying or the Underlying Components, the difficulty to buy and/or sell the Underlying or Underlying Components in a short period of time without its price being affected, or any comparable event that leads to an extraordinary illiquidity in any Underlying or Underlying Components, as determined by the Issuer in its sole discretion
Underlying / Underlying Components
Equity instruments, debt instruments, indices, exchange-traded funds, not listed funds and other transferable securities according to Art. 4 Para. 1 No. 44 and Annex I Section C MiFID II, as specified in the relevant Final Terms
All Underlying(s) / Underlying Component(s) must be in the form of book-entry securities
U.S.
United States
USD
United States Dollar