Important risk and regulatory disclosure about T-DX
T-DX is an Organised Trading Facility (“OTF”), in accordance with Art. 42 of the Swiss Financial Market Infrastructure Act (“FMIA”), for the multilateral trading in digital assets, securities and/or other financial instruments, whose purpose is the exchange of bids and the conclusion of contracts based on discretionary rules.
Taurus SA (“Taurus”), in its capacity as FINMA-regulated securities firm, is the operator of the T-DX OTF according to Art. 43 FMIA. This means that Taurus regulates the conduct of participants and issuers, monitors trading and market activity, and maintains rules and guidance to provide a fair and transparent venue for raising capital and trading digital assets, securities and other financial instruments.
Taurus draws the attention of T-DX (direct and indirect) participants about the following important risks and information regarding T-DX and the digital assets, securities and/or other financial instruments admitted to trading on T-DX:
- T-DX is not a stock exchange, nor a multilateral trading facility (“MTF”), nor a DLT trading facility, but an organised trading facility (“OTF”) (see definitions below). This means in particular that Taurus is entitled to exercise discretion in accordance with Art. 6.4 of the T-DX OTF Rulebook and that the admitted instruments are not limited to securities, but also includes digital assets and/or other financial instruments.
|Stock exchange according to Art. 26 let. b FMIA||Institution for multilateral trading of securities, where securities are listed, whose purpose is the simultaneous exchange of bids among several participants and the conclusion of contracts based on non-discretionary rules|
|Multilateral trading facility ("MTF") according to Art. 26 let. c FMIA|
Institution for multilateral trading of securities, whose purpose is the simultaneous exchange of bids among several participants and the conclusion of contracts based on non-discretionary rules without listing securities
|DLT trading facility according to Art. 73a FMIA|
Institution for multilateral trading of DLT securities, whose purpose is the simultaneous exchange of bids among several participants and the conclusion of contracts based on non-discretionary rules and which meets at least one of the following criteria:
(a) it admits natural persons and legal entities as participants, provided that they declare that they are participating in their own name and for their own account (Art. 73c para. 1 let. e)
(b) it holds DLT securities in central custody based on uniform rules and procedures
(c) it clears and settles transactions in DLT securities based on uniform rules and procedures
|Organized trading facility ("OTF") according to Art. 42 FMIA|
(a) multilateral trading of securities or other financial instruments, whose purpose is the exchange of bids and the conclusion of contracts based on discretionary rules
(b) multilateral trading of financial instruments other than securities, whose purpose is the exchange of bids and the conclusion of contracts based on non-discretionary rules
(c) bilateral trading of securities or other financial instruments, whose purpose is the exchange of bids
- According to the T-DX OTF Rulebook, Taurus may use various types of market schedules ranging from continuous limit order books to discretionary auctions. Taurus may change market schedules at any time at its own and full discretion. It may also decide on, set and change at any time, price bands (e.g. trade static price band, buy/sell static price bands, circuit breakers) at its own and full discretion. This is the participants’ sole responsibility and duty to carefully analyse and understand the specific market schedule and price bands applicable for a given security, digital asset and/or financial instrument before placing an order. Details about the applicable market schedule and price bands are provided in the top banner of the T-DX trading screen, by clicking on the “Schedule” icon next to the price, and by consulting the “Markets & trading” section of the FAQ. If a participant placed an order and this order was executed, then it is impossible for the participant to request the reversal of a trade. If any price band is set, then any order/trade outside of the price band will be rejected.
- Taurus may use the T-DX OTF to trade against its own book, in particular for the purpose of providing liquidity to some market segments (as liquidity provider) or acting as a market maker in accordance with Cm. 22 of FINMA Circular 2018/1 “Organised trading facilities”. In such cases, Taurus publishes details once a month, broken down by product category, of the volumes traded via the OTF by participants and on its own account. The maximum daily volume of trading on own account are also published for the previous month, again broken down by product category. Those publications are available for participants in the “Transparency” footer tab in the T-DX account.
- Standard prices applicable on the T-DX OTF are publicily disclosed in the T-DX Pricing section.
- Digital assets on TDX are held on a collective/pooled/omnibus basis, only serving the purpose of executing/settling client transactions, with no interests paid on them. Those assets are held in accordance with the Custody Regulations.
- Most of the digital assets, securities and other financial instruments admitted to trading on the T-DX OTF are not listed (unlisted) and are exclusively traded “off-exchange/over-the-counter” (so called “OTC/private securities”). As a result, Swiss regulations that apply to (1) issuers that have securities listed on a stock exchange in Switzerland, and (2) to its investors, do not apply. In particular, the provisions of FMIA regarding the mandatory disclosure of large interests in listed companies (Article 120 et seq. FMIA) or public takeovers (Article 125 et seq. FMIA) do not apply. This means, among other things, (i) that the beneficial owners of large interests in the Company are not under any duty to make the nature of their interest in the Company public, (ii) that the provisions of the FMIA designed to guarantee equal treatment and undistorted choice of shareholders in the event of a public takeover offer do not apply if a public takeover offer is made for the shares of the Company, and (iii) that the provisions of the FMIA that require any person who acquires more than one third of the voting rights of a company to make a cash offer at a minimum price for all the listed shares of the company does not apply. Finally, the Stock Exchange Rules (e.g., minimum free float, reporting of management transactions, lock-up of management transactions, ad-hoc publicity rules), typically applicable to listed securities, do not apply neither in such a case. The same rules as for a normal private company do apply instead (like for any other private equity investments).
- An investment in an OTC/private security (e.g., private equity, private debt) is speculative and involves a high degree of risk, that can lead in certain cases to a substantial or total loss of capital, especially in case of bankruptcy and/or default. OTC/private security investments are not usually subject to regulation, in particular with regard to investor protection. Because of this and their lack of transparency (e.g. limited disclosure of financial accounts or no publication), they entail higher risks for investors. Reliable information regarding issuers of OTC/private securities, their prospects, or the risks associated with the business of any particular issuer or an investment in the issuer’s securities may not be available. As a result, it may be difficult to properly value an investment in an OTC/private security. Please read carefully the risks associated with private equity investments in the paper called Risks Involved in Trading Financial Instruments published by SwissBanking.
- Issuers of OTC/private securities admitted to trading on T-DX have no duty to provide any information to investors more than what is required by law to normal private company. Trading of a security on T-DX does not in itself create any ongoing filing or reporting obligations. There can be no assurance that the information provided on the T-DX platform is accurate or error free. Any user of such information expressly assumes all risks from using the information. In particular, Taurus does not review, and is not responsible for confirming, the accuracy of issuer documents and information submitted to T-DX for inclusion on this site. The issuer and its management are primarily responsible for the accuracy of any information regarding the issuer. Investors are urged to confirm directly with the issuer the accuracy of any information obtained from this site prior to making any investment decision. The information on this site is not intended to be used as the basis for any investment decision.
- Many market segments available for trading on T-DX are relatively illiquid, or “thinly traded”, and may be even in some cases totally illiquid. The market for a financial instrument that is not admitted to trading on any trading venue is not regarded as being liquid within the meaning of Article 42 FMIO. Moreover, the market for a financial instrument is only regarded as being liquid within the meaning of Article 42 FMIO if the instrument was traded at least 100 times per trading day on average in the previous year (from January to December) on the trading venue to which it was first admitted.
- Illiquid securities are often difficult for investors to buy or sell without dramatically affecting the quoted price. In some cases, the liquidation of a position in an OTC/private security may not be possible within a reasonable period of time. Last T-DX prices of illiquid or thinly-traded digital assets, securities and financial instruments may differ substantially, and by several orders of magnitude, from their fair values. Hence, last T-DX prices are not an indication, nor a guarantee, of future T-DX prices and fair values. Moreover, in the case of digital assets, securities and/or other financial instruments exclusively traded off-exchange/OTC, last T-DX prices and volumes may differ materially from the prices and volumes of other transactions executed OTC or bilaterally. Those third-party trades and prices are not transparent and not reported on the T-DX OTF. Finally, last prices may also differ materially from the fair value in the case of low free-float, closely-held shares, knowing that there are no minimum free float requirements applicable for OTC/private securities.
- Taurus may decide unilaterally, at any time and at its own discretion, to withdraw, cancel, suspend or revoke a digital asset, security and/or financial instrument from being admitted to trading on the T-DX OTF. In such a case, liquidity may be substantially reduced, or even in some case totally disappear, and current shareholders/investors may face difficulties, or in some case a total impossibility, to sell their holdings.
- In the case of ledger-based securities booked on a securities ledger not operated by Taurus (e.g., public Ethereum mainnet), Taurus performs an assessment of the compliance of the securities ledger with Art. 973d para. 2 of the Swiss Code of Obligations, before admitting the relevant securities, and regularly thereafter (at least once a year). In case of relevant findings, participants will be informed accordingly via a T-DX information notice. “Registration agreements” are freely available for verified users in the Marketplace section of the T-DX website. For more information about the relevant aspects of the distributed ledger (e.g., governance, technical risks), participants are invited to read in detail the Risks involved in trading and custody of digital assets and the Risks involved in tokenized securities/assets.
More information is available in the T-DX OTF Rulebook. Moreover, participants are informed that Taurus publishes regular information notices about the T-DX OTF. Participants are requested to regularly consult the notice page if they use T-DX.
IMPORTANT RISK AND REGULATORY DISCLOSURE ABOUT TAURUS ARE PUBLISHED HERE.