Quick answer: a security token is a financial instrument (a transferable security represented using distributed ledger technology), not a crypto-asset regulated by MiCA. That is why its trading and settlement on the secondary market are governed by securities markets law: Directive 2014/65/EU (MiFID II), Spain's Law 6/2023 on Securities Markets and Investment Services (LMVSI) and, where blockchain-based infrastructure is involved, the DLT Pilot Regime (Regulation (EU) 2022/858). In Spain, the decisive milestone arrived in late 2025: the CNMV authorised the first trading and settlement system based on distributed ledger technology (a DLT-TSS), operated by Securitize. This means that, for the first time, a single authorised operator can match orders and settle the transfer of a security token within one regulated infrastructure, without going through the traditional chain of exchange plus central securities depository. For an investor, it means being able to buy and sell a tokenised holding with legal certainty; for an issuer, having a regulated route to provide liquidity for its securities.
Why the secondary market for a security token is not governed by MiCA
The starting distinction shapes everything else. Regulation (EU) 2023/1114 (MiCA) expressly excludes from its scope crypto-assets that qualify as financial instruments (Art. 2.4). A security token —a share, a bond or a fund holding represented on a distributed ledger— remains a transferable security in legal terms. Its admission to trading, its transfer and its settlement are therefore subject to the securities markets regime, not to the crypto-asset regime.
At the European level, that regime is led by MiFID II (Directive 2014/65/EU), which defines what a financial instrument is, what a multilateral trading facility is and what obligations fall on those who provide investment services. In Spain, the transposition and development currently in force are set out in Law 6/2023 of 17 March on Securities Markets and Investment Services (BOE-A-2023-7053), which also expressly recognises that transferable securities may be represented using distributed ledger technology systems, alongside physical certificates and book entries.
Which infrastructures allow a security token to be traded and settled
The missing piece was a market infrastructure that could accommodate blockchain without giving up regulatory safeguards. The DLT Pilot Regime provided it, established by Regulation (EU) 2022/858 of 30 May 2022 and applicable since 23 March 2023. This regulation creates a controlled testing environment (a Europe-wide sandbox) that allows market infrastructures to request temporary exemptions from certain requirements of MiFID II and of Regulation (EU) 909/2014 on central securities depositories, provided they meet reinforced investor protection conditions (Regulation (EU) 2022/858, recitals and Arts. 4 to 6).
The three figures of the DLT Pilot Regime
The regulation defines three types of infrastructure, depending on the functions they perform:
- DLT-MTF (DLT-based multilateral trading facility): matches buy and sell orders for financial instruments on distributed ledger technology, but does not settle on its own.
- DLT-SS (DLT-based settlement system): settles —that is, gives effect to the transfer and records the change of ownership— transactions in security tokens.
- DLT-TSS (DLT-based trading and settlement system): combines both functions in a single operator, so that the same entity trades and settles.
The DLT-TSS figure is the most disruptive because it breaks the traditional separation between the market (the exchange) and post-trade activity (the central depository). That unification is only possible thanks to the pilot regime's exemptions and to the fact that the distributed ledger allows the recording of ownership and settlement to occur almost simultaneously (Regulation (EU) 2022/858, Art. 3).
What can be traded and within what limits
The pilot regime is not unlimited: it sets thresholds to contain systemic risk during the testing phase. It only admits shares of issuers with a market capitalisation below EUR 500 million, bonds and other forms of securitised debt below EUR 1 billion, and units of collective investment undertakings whose assets under management are below EUR 500 million (Regulation (EU) 2022/858, Art. 3). These thresholds explain why the first natural use case for these infrastructures is medium-sized and small issuances, precisely the segment where secondary liquidity has historically been hardest to achieve.
The Spanish milestone: the CNMV authorises the first DLT-TSS
On 26 November 2025, the CNMV Board authorised the first trading and settlement system based on distributed ledger technology in Spain, named SECURITIZE and operated by Securitize Europe Brokerage and Markets, S.V., S.A. It is one of the first DLT-TSS authorised to take part in the pilot regime across the European Union (CNMV, communication of 26 November 2025).
The authorisation enables the trading of the financial instruments listed in Article 3 of Regulation (EU) 2022/858, including tokenised shares and bonds, within the thresholds cited above. In practice, this makes Spain one of the first European jurisdictions with a regulated, operational secondary market for security tokens, where a single entity matches the transaction and settles the transfer on a blockchain.
How a security token is transferred in this market
The journey of a transaction in a DLT-TSS is conceptually simple. The investor who wants to sell submits an order to the system; the operator matches it with a compatible buy order; and, once matched, settlement takes place by updating the distributed ledger, which then reflects the buyer as the new holder. Because trading and settlement coexist in the same infrastructure, timeframes and intermediaries are reduced compared with the traditional circuit. The registry function —ensuring that the recorded ownership is valid, complete and enforceable— rests on the LMVSI framework and, in the primary market, on the figure of the entity responsible for registration and recording (ERIR), which verifies that the representation on DLT preserves legal certainty.
To understand how that registry function fits with the traditional post-trade infrastructure, it is worth reviewing the differences between the ERIR model and that of the classic central depository, which we address in our analysis on ERIR versus Iberclear. And to place the entire legal framework for representing securities through DLT, the starting point is Law 6/2023 (LMVSI) and tokenisation.
Frequently asked questions
Does a security token trade on a traditional exchange?
Not necessarily. It can be admitted to trading on a DLT-based multilateral trading facility (DLT-MTF) or on a combined trading and settlement system (DLT-TSS) authorised under the pilot regime. It does not need to be listed on a classic regulated market, although it must comply with the applicable MiFID II and LMVSI obligations.
What is the difference between a DLT-MTF and a DLT-TSS?
A DLT-MTF only trades: it matches orders but does not settle. A DLT-TSS trades and settles within the same infrastructure, integrating into a single operator functions traditionally carried out by separate entities (the trading venue and the central securities depository).
Does MiCA apply to the trading of security tokens?
No. MiCA excludes from its scope crypto-assets that are financial instruments (Regulation (EU) 2023/1114, Art. 2.4). The trading and settlement of security tokens are governed by MiFID II, the LMVSI and, where relevant, the DLT Pilot Regime.
Can any issuance be traded on these infrastructures?
No. The pilot regime sets thresholds: shares of issuers with a market capitalisation below EUR 500 million, securitised debt below EUR 1 billion, and units of collective investment undertakings with assets below EUR 500 million (Regulation (EU) 2022/858, Art. 3).
What this means for you
If you are an investor, the existence of an authorised DLT-TSS in Spain opens the possibility of buying and selling security tokens in an environment supervised by the CNMV, with the safeguards proper to a financial instrument rather than those of an unregulated crypto-asset. You should always verify that the infrastructure is in fact authorised and that the specific issuance fits within the pilot regime's thresholds.
If you are an issuer, having a regulated secondary market changes the calculus of a tokenisation: it lets you offer investors an orderly exit route, which has historically been the biggest obstacle to medium-sized issuances. The choice between issuing under the general LMVSI framework with an ERIR or structuring the operation so that it is tradable on a DLT-TSS depends on the investor profile, the volume and the liquidity objectives.
This content is for general information and educational purposes only. It does not constitute legal, tax or investment advice. Securities markets law and the DLT pilot regime evolve, and their application depends on the specific circumstances of each issuance. Before making any decision, consult a professional adviser and verify the authorisation status of the infrastructures with the CNMV.
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