IDSX Wallet & On-chain Transfer Rules

1.1

These Wallet & On-chain Transfer Rules establish the requirements governing the use of blockchain wallets and the transfer of digital securities admitted to listing or trading on the International Digital Securities Exchange (“IDSX” or the “Exchange”).

1.2

The purpose of these Rules is to ensure that the use of distributed ledger technology does not undermine:

• (a) investor identification requirements;
• (b) securities ownership records;
• (c) transfer restrictions;
• (d) investor eligibility requirements;
• (e) AML/CFT and sanctions controls;
• (f) shareholder rights;
• (g) market integrity;
• (h) settlement integrity; or
• (i) applicable legal and regulatory requirements.

1.3

A blockchain wallet address does not, by itself, establish the legal identity of the holder of a listed security.

1.4

The technical ability to transfer a digital security does not, by itself, constitute authority to make that transfer.

1.5

Digital securities must only be transferred in accordance with these Rules and all other applicable IDSX Rules.

2.1

These Rules apply to:

• (a) Investors;
• (b) Listed Issuers;
• (c) Brokers;
• (d) Trading Participants;
• (e) Custodians;
• (f) nominees;
• (g) wallet service providers;
• (h) registry providers;
• (i) settlement service providers;
• (j) Sponsors and Market Makers where relevant; and
• (k) any other person involved in the holding, transfer or administration of IDSX-listed digital securities.

2.2

These Rules must be read together with:

• (a) the IDSX Market Rules;
• (b) the Listing Rules;
• (c) the Continuing Listing Obligations;
• (d) the Digital Securities Rules;
• (e) the Clearing & Settlement Rules;
• (f) the Investor Eligibility & Suitability Rules;
• (g) the KYC, AML & Sanctions Compliance Rules;
• (h) the Client Assets & Recordkeeping Rules;
• (i) the Corporate Actions Rules; and
• (j) any applicable conditions imposed by IDSX.

3.1

A listed digital security must not become freely transferable solely because it is represented on a public blockchain or distributed ledger.

3.2

Transfers remain subject to all applicable:

• (a) securities laws;
• (b) company laws;
• (c) AML/CFT requirements;
• (d) sanctions requirements;
• (e) investor eligibility requirements;
• (f) jurisdictional restrictions;
• (g) transfer restrictions;
• (h) lock-up or escrow requirements;
• (i) court orders;
• (j) regulatory directions;
• (k) issuer constitutional requirements; and
• (l) IDSX Rules.

3.3

Where a transfer is prohibited under applicable law or IDSX Rules, the relevant technical infrastructure should, where reasonably practicable, prevent or restrict the transfer from being completed.

4.1

IDSX-listed digital securities may only be held in, transferred to or transferred from wallets that satisfy the applicable IDSX approval requirements.

4.2

An “Approved Wallet” means a wallet address that has been registered or otherwise approved for use with IDSX-listed digital securities.

4.3

Approval of a wallet may require confirmation of:

• (a) the identity of the person or entity associated with the wallet;
• (b) completion of applicable KYC and AML/CFT checks;
• (c) sanctions screening;
• (d) investor eligibility;
• (e) jurisdiction of residence or establishment;
• (f) ownership or control of the wallet;
• (g) the type of wallet;
• (h) the relevant blockchain network; and
• (i) any other information reasonably required for compliance or market integrity purposes.

4.4

Approval of a wallet does not constitute approval of every transaction involving that wallet.

5.1

An investor seeking to use a wallet for IDSX-listed digital securities must register that wallet through an approved process.

5.2

The registration process may be conducted by:

• (a) IDSX;
• (b) an authorised Broker;
• (c) an authorised Custodian;
• (d) another approved intermediary; or
• (e) another person authorised under the IDSX Rules.

5.3

The registration process must establish sufficient information to link the wallet to the relevant investor or intermediary account.

5.4

IDSX may require a wallet holder to demonstrate control of the wallet before approval.

6.1

Proof of wallet control may be required before a wallet is approved.

6.2

Methods may include:

• (a) cryptographic message signing;
• (b) transfer of a nominal verification amount;
• (c) wallet connection and authentication;
• (d) confirmation through a regulated Custodian;
• (e) verification through an approved technical service; or
• (f) another method accepted by IDSX.

6.3

Proof of technical control of a wallet does not establish beneficial ownership where the wallet is held on behalf of another person.

7.1

IDSX may permit an investor to hold listed digital securities in a self-custody wallet.

7.2

A self-custody wallet may only be approved where IDSX or the responsible intermediary is satisfied that:

• (a) the investor has completed required identity and eligibility checks;
• (b) the investor controls the relevant wallet;
• (c) the wallet is technically compatible with the applicable digital security;
• (d) applicable transfer restrictions can be enforced;
• (e) required compliance monitoring can be maintained; and
• (f) use of the wallet does not materially undermine the integrity of ownership or securities records.

7.3

An investor using a self-custody wallet is responsible for safeguarding its private keys and access credentials.

7.4

IDSX is not responsible for loss resulting solely from an investor’s failure to secure a self-custody wallet, except to the extent otherwise required by applicable law.

8.1

IDSX-listed digital securities may be held through an approved Custodian or other approved intermediary.

8.2

Where a Custodian uses one or more wallets on behalf of multiple clients, the Custodian must maintain adequate internal records identifying the beneficial interests of each relevant client.

8.3

Custodial arrangements must comply with applicable:

• (a) custody requirements;
• (b) client asset requirements;
• (c) recordkeeping requirements;
• (d) reconciliation requirements;
• (e) AML/CFT obligations; and
• (f) IDSX Rules.

9.1

IDSX may permit the use of omnibus wallets where multiple investors’ digital securities are held through a single wallet address.

9.2

An omnibus wallet must be operated by an approved intermediary.

9.3

The intermediary must maintain records sufficient to identify, at all times:

• (a) each underlying investor;
• (b) the quantity of securities attributable to each investor;
• (c) all relevant transfers;
• (d) all corporate action entitlements;
• (e) applicable restrictions; and
• (f) the aggregate balance represented by the omnibus wallet.

9.4

The aggregate internal client records must reconcile with the on-chain balance of the omnibus wallet.

10.1

Each Approved Wallet must be associated with a verified holder or approved intermediary.

10.2

A verified holder may be:

• (a) an individual;
• (b) a legal entity;
• (c) a Broker;
• (d) a Custodian;
• (e) a nominee;
• (f) another regulated intermediary; or
• (g) another category approved by IDSX.

10.3

Relevant records must allow the relationship between:

• (a) the wallet address;
• (b) the verified holder;
• (c) the investor account or intermediary account; and
• (d) the securities held through the wallet,

to be established when required.

10.4

A wallet address must not be treated as a substitute for a legally required shareholder, securities or beneficial ownership record.

11.1

A transfer of IDSX-listed digital securities may only be completed where the transfer is permitted under applicable law and IDSX Rules.

11.2

A transfer may be permitted where:

• (a) the sending wallet is an Approved Wallet;
• (b) the receiving wallet is an Approved Wallet;
• (c) the sender is authorised to transfer the relevant securities;
• (d) the recipient is eligible to hold the relevant securities;
• (e) applicable transfer restrictions are satisfied;
• (f) the transfer does not breach any lock-up, escrow or other restriction;
• (g) required sanctions and compliance checks have been completed; and
• (h) the transfer can be appropriately recorded and reconciled.

11.3

A listed digital security may not be transferred to an unverified wallet solely because the blockchain technically permits the transfer.

12.1

IDSX may permit transfers between Approved Wallets controlled by verified investors.

12.2

Before a transfer is completed, the relevant system may verify:

• (a) the status of the sending wallet;
• (b) the status of the receiving wallet;
• (c) investor eligibility;
• (d) jurisdictional restrictions;
• (e) sanctions status;
• (f) security-specific restrictions;
• (g) holding limits, where applicable; and
• (h) any other applicable compliance condition.

12.3

A transfer that fails an applicable control may be rejected, blocked or referred for review.

13.1

An IDSX-listed digital security must not ordinarily be transferred to a wallet that has not completed the applicable approval process.

13.2

Where an attempted transfer is made to an unverified wallet, the transfer should, where technically practicable, be prevented by the smart contract or transfer control mechanism.

13.3

If a transfer to an unverified wallet occurs despite applicable controls, the relevant Broker, Custodian, issuer or service provider must promptly:

• (a) investigate the transfer;
• (b) determine the identity and status of the recipient where possible;
• (c) notify IDSX where the matter is material;
• (d) prevent further unauthorised transfers where possible;
• (e) correct relevant records; and
• (f) take any other remedial action reasonably required.

13.4

An unauthorised on-chain transfer does not automatically determine the legal ownership of the underlying security.

14.1

IDSX may permit off-market transfers of listed digital securities where such transfers are lawful and appropriately recorded.

14.2

Examples may include:

• (a) transfers between accounts of the same beneficial owner;
• (b) transfers between custodians;
• (c) inheritance or succession;
• (d) transfers pursuant to a court order;
• (e) internal corporate reorganisations;
• (f) transfers arising from a merger or acquisition;
• (g) gifts, where permitted;
• (h) private transfers permitted under applicable law; or
• (i) another transfer approved by IDSX.

14.3

Off-market transfers remain subject to applicable KYC, AML/CFT, sanctions, eligibility and recordkeeping requirements.

15.1

A Broker may facilitate transfers of digital securities on behalf of clients where authorised to do so.

15.2

A Broker must ensure that:

• (a) the client is properly identified;
• (b) the sending and receiving wallet status is known;
• (c) transfer restrictions have been checked;
• (d) required records are maintained;
• (e) beneficial ownership information is preserved; and
• (f) the transfer is reflected accurately in client records.

15.3

A Broker must not knowingly facilitate a transfer intended to evade IDSX transfer restrictions.

16.1

A Custodian may transfer listed digital securities between approved custody wallets where the transfer is consistent with client instructions and applicable requirements.

16.2

A Custodian must maintain sufficient records to distinguish between:

• (a) transfers that change beneficial ownership; and
• (b) operational transfers that do not change beneficial ownership.

16.3

Operational wallet movements must not be treated as changes in beneficial ownership solely because the on-chain wallet address changes.

17.1

Digital securities may be subject to restrictions including:

• (a) lock-up periods;
• (b) escrow arrangements;
• (c) investor eligibility requirements;
• (d) jurisdictional restrictions;
• (e) maximum holding limits;
• (f) restricted investor categories;
• (g) issuer constitutional restrictions;
• (h) court orders;
• (i) regulatory directions; or
• (j) sanctions controls.

17.2

Applicable restrictions should, where reasonably practicable, be incorporated into the technical transfer-control framework.

17.3

IDSX may require an issuer to demonstrate that material transfer restrictions can be effectively enforced.

18.1

Securities subject to a lock-up or escrow condition must not be transferred except as permitted under the relevant restriction.

18.2

The relevant restriction must be reflected in:

• (a) issuer records;
• (b) registry records;
• (c) IDSX records; and
• (d) the digital securities infrastructure where technically appropriate.

18.3

The expiry or release of a restriction must be processed in a controlled manner.

19.1

IDSX may restrict the holding or transfer of particular digital securities based on the jurisdiction of the investor.

19.2

A transfer may be blocked where the recipient:

• (a) is located in a prohibited jurisdiction;
• (b) is not eligible to acquire the relevant security under applicable law;
• (c) cannot receive the security without triggering a regulatory restriction; or
• (d) fails a jurisdiction-specific requirement.

19.3

Wallet approval may include jurisdictional attributes that are used by the transfer-control system.

20.1

Where a security is only available to a specified category of investor, the digital securities infrastructure must support enforcement of that restriction.

20.2

Investor categories may include:

• (a) retail investors;
• (b) wholesale investors;
• (c) accredited or sophisticated investors;
• (d) institutional investors;
• (e) professional investors; or
• (f) another category recognised under applicable law.

20.3

The classification of an investor must be maintained in accordance with the IDSX Investor Eligibility & Suitability Rules.

21.1

Transfers involving sanctioned or prohibited persons or wallet addresses must be handled in accordance with applicable law and the IDSX KYC, AML & Sanctions Compliance Rules.

21.2

Where legally required, a transfer may be:

• (a) blocked;
• (b) rejected;
• (c) frozen;
• (d) restricted; or
• (e) reported to the appropriate authority.

21.3

IDSX may require enhanced review of a wallet associated with elevated sanctions or illicit-finance risk.

22.1

A wallet may be subject to enhanced review where there is credible information indicating that it may be associated with:

• (a) theft;
• (b) fraud;
• (c) hacking;
• (d) ransomware;
• (e) sanctions evasion;
• (f) money laundering;
• (g) terrorism financing;
• (h) darknet activity; or
• (i) another material financial crime risk.

22.2

A high-risk indicator does not automatically establish wrongdoing.

22.3

Appropriate risk-based review must be conducted before further action is taken.

23.1

Digital securities admitted to IDSX should, where appropriate, use smart contract or equivalent technical controls capable of supporting transfer restrictions.

23.2

Such controls may include:

• (a) wallet allowlisting;
• (b) wallet blocking;
• (c) jurisdiction-based restrictions;
• (d) investor classification controls;
• (e) lock-up enforcement;
• (f) transfer approval functions;
• (g) pause functions;
• (h) mint and burn controls; and
• (i) administrative recovery mechanisms where legally and operationally appropriate.

23.3

Administrative powers affecting listed digital securities must be subject to appropriate governance and access controls.

24.1

IDSX or an authorised person may maintain an allowlist of wallets permitted to hold or receive specified listed digital securities.

24.2

The allowlist may record relevant compliance attributes without requiring personal identity information to be published on-chain.

24.3

Removal of a wallet from an allowlist may prevent future transfers involving that wallet but does not, by itself, extinguish existing legal ownership rights.

25.1

A wallet may be blocked from further transfers where reasonably necessary due to:

• (a) sanctions;
• (b) suspected compromise;
• (c) fraud;
• (d) legal order;
• (e) breach of transfer restrictions;
• (f) loss of investor eligibility;
• (g) unresolved ownership dispute;
• (h) material compliance concerns; or
• (i) another legitimate regulatory or market integrity reason.

25.2

A block should be proportionate to the relevant risk and maintained only for so long as reasonably necessary, subject to applicable law.

26.1

An investor may request to replace an Approved Wallet with another wallet.

26.2

Before the replacement wallet is approved, the investor may be required to complete:

• (a) identity confirmation;
• (b) proof of control of the new wallet;
• (c) security verification;
• (d) eligibility checks; and
• (e) other required compliance procedures.

26.3

The change must be accurately reflected in relevant records.

27.1

Loss of access to a wallet does not automatically extinguish the investor’s legal rights in the underlying security.

27.2

Where an investor claims to have lost access to a wallet, the relevant Broker, Custodian, issuer or IDSX may require satisfactory proof of:

• (a) identity;
• (b) beneficial ownership;
• (c) prior control of the wallet;
• (d) the relevant security position; and
• (e) circumstances of the loss.

27.3

Where legally and technically permissible, a recovery process may involve:

• (a) freezing the affected wallet;
• (b) invalidating or restricting the affected token balance;
• (c) burning and reissuing digital representations;
• (d) transferring the securities representation to a replacement Approved Wallet; or
• (e) another controlled recovery mechanism.

27.4

Any recovery process must preserve the integrity of the legal securities record.

28.1

Where a wallet is suspected of being compromised, IDSX or another authorised person may take temporary protective action.

28.2

Such action may include:

• (a) blocking outgoing transfers;
• (b) suspending the wallet;
• (c) requiring enhanced identity verification;
• (d) moving assets to a secure Approved Wallet where legally authorised; or
• (e) taking other reasonable protective steps.

28.3

Protective action does not determine the final legal ownership of disputed securities.

29.1

A mistaken blockchain transfer does not necessarily determine the legal ownership of the underlying security.

29.2

Where a mistaken transfer occurs, IDSX or the relevant service provider may investigate:

• (a) the identity of the sender;
• (b) the identity of the recipient;
• (c) the transaction history;
• (d) the legal entitlement to the security; and
• (e) whether corrective action is permitted.

29.3

Corrective action may include reversal mechanisms, token reissuance, blocking or record correction where supported by applicable law and the relevant digital securities architecture.

30.1

A digital security may be transferred following death, inheritance, probate, succession or another legally recognised transfer of title.

30.2

The person requesting the transfer must provide appropriate legal documentation.

30.3

The recipient must satisfy applicable wallet approval and investor eligibility requirements before receiving the digital security.

30.4

The relevant legal ownership records must be updated as part of the transfer.

31.1

IDSX and relevant participants must comply with legally binding court orders and regulatory directions affecting digital securities.

31.2

Such orders may require:

• (a) freezing;
• (b) transfer restrictions;
• (c) seizure;
• (d) transfer to another holder;
• (e) disclosure of records; or
• (f) another action required by law.

31.3

Technical systems should support compliance with lawful orders where reasonably practicable.

32.1

Blockchain confirmation alone does not necessarily determine legal finality of a securities transfer.

32.2

Transfer finality will be determined in accordance with:

• (a) applicable law;
• (b) the IDSX Clearing & Settlement Rules;
• (c) the relevant registry arrangements;
• (d) the applicable smart contract structure; and
• (e) any relevant settlement procedures.

32.3

IDSX may specify when an on-chain transfer is regarded as final for market operational purposes.

33.1

Where the legal shareholder register or securities register is the authoritative ownership record under applicable law, on-chain records must be reconciled with that register.

33.2

Where applicable law permits the distributed ledger itself to form part of the legally recognised ownership record, the relevant structure must be clearly documented.

33.3

IDSX must be able to determine the legally recognised ownership framework applicable to each listed digital security.

34.1

Appropriate reconciliation must be maintained between:

• (a) legal securities records;
• (b) blockchain records;
• (c) IDSX records;
• (d) Broker records;
• (e) Custodian records; and
• (f) settlement records,

where applicable.

34.2

Reconciliation must identify any material difference in:

• (a) token quantity;
• (b) ownership;
• (c) restricted status;
• (d) transfer history; or
• (e) beneficial ownership records.

34.3

Material discrepancies must be investigated promptly.

35.1

The number of valid digital tokens representing a security must not exceed the number of corresponding securities validly issued and authorised for digital representation.

35.2

Any excess, duplicate or unauthorised token must be investigated immediately.

35.3

IDSX may suspend transfers or trading until the discrepancy has been resolved.

36.1

Wallet and digital ownership records must support accurate implementation of corporate actions.

36.2

Relevant corporate actions may include:

• (a) dividends;
• (b) distributions;
• (c) voting;
• (d) rights issues;
• (e) bonus issues;
• (f) share splits;
• (g) consolidations;
• (h) conversions;
• (i) redemptions; and
• (j) mergers or reorganisations.

36.3

Where a record date applies, the system must be capable of identifying relevant holders or beneficial owners in accordance with the applicable legal structure.

37.1

Relevant persons must maintain records sufficient to demonstrate compliance with these Rules.

37.2

Records may include:

• (a) wallet registration records;
• (b) identity records;
• (c) wallet-control verification;
• (d) wallet ownership records;
• (e) transfers;
• (f) approvals and rejections;
• (g) compliance reviews;
• (h) restrictions;
• (i) freezes;
• (j) wallet changes;
• (k) recovery actions;
• (l) reconciliation reports; and
• (m) relevant communications.

37.3

Records must be retained for the period required by applicable law and IDSX Rules.

38.1

Relevant persons must maintain appropriate systems for monitoring wallet activity and transfers.

38.2

Monitoring may include:

• (a) unusual transfer size;
• (b) unusual transfer frequency;
• (c) transfers involving high-risk wallets;
• (d) rapid movement between multiple wallets;
• (e) attempted circumvention of wallet controls;
• (f) transfers inconsistent with investor profile;
• (g) sanctions indicators; and
• (h) other unusual or potentially suspicious activity.

38.3

Monitoring should be risk-based and proportionate.

39.1

Potentially suspicious wallet or transfer activity must be handled in accordance with applicable AML/CFT law and the IDSX KYC, AML & Sanctions Compliance Rules.

39.2

Nothing in these Rules requires a person to disclose the filing or contemplated filing of a suspicious activity report where such disclosure is prohibited by law.

40.1

IDSX may temporarily suspend transfers involving:

• (a) a particular wallet;
• (b) a particular security;
• (c) a particular investor;
• (d) a particular blockchain network; or
• (e) a category of transactions,

where necessary to maintain compliance, ownership integrity or market integrity.

40.2

A transfer suspension may be imposed where:

• (a) ownership cannot be reliably determined;
• (b) a security incident has occurred;
• (c) the relevant smart contract is compromised;
• (d) sanctions concerns arise;
• (e) a legal restriction applies;
• (f) token reconciliation has failed; or
• (g) another material risk exists.

41.1

IDSX may take immediate action where a wallet or transfer event creates a serious risk to:

• (a) investor assets;
• (b) ownership records;
• (c) market integrity;
• (d) settlement integrity; or
• (e) compliance with law.

41.2

Emergency action may include:

• (a) pausing transfers;
• (b) blocking specified wallets;
• (c) suspending a smart contract;
• (d) requiring reconciliation;
• (e) restricting mint or burn functions; or
• (f) taking another reasonable protective measure.

42.1

A Listed Issuer must ensure that the digital securities structure used for its listed securities is capable of supporting applicable transfer restrictions.

42.2

The issuer must cooperate with IDSX in relation to:

• (a) ownership verification;
• (b) token supply reconciliation;
• (c) transfer restrictions;
• (d) smart contract controls;
• (e) wallet recovery;
• (f) corporate actions; and
• (g) technical incidents.

42.3

The issuer must not permit an unauthorised technical change that materially weakens required transfer controls.

43.1

A Broker must maintain appropriate procedures relating to wallet registration, transfer requests and ownership records.

43.2

A Broker must not knowingly facilitate:

• (a) transfers to unverified wallets;
• (b) transfers to prohibited persons;
• (c) circumvention of jurisdiction restrictions;
• (d) circumvention of lock-up restrictions; or
• (e) another prohibited transfer.

43.3

A Broker must maintain sufficient records to explain transfers facilitated on behalf of its clients.

44.1

A Custodian must maintain appropriate wallet security, client asset segregation and recordkeeping arrangements.

44.2

A Custodian using omnibus wallets must maintain accurate beneficial ownership records.

44.3

A Custodian must ensure that operational wallet transfers do not result in inaccurate ownership records.

45.1

An investor must provide accurate information in connection with wallet approval.

45.2

An investor must not:

• (a) knowingly provide a wallet controlled by another undisclosed person;
• (b) use a wallet to circumvent investor eligibility restrictions;
• (c) transfer digital securities to an unapproved recipient;
• (d) attempt to bypass smart contract restrictions; or
• (e) knowingly provide false or misleading information regarding wallet ownership or control.

45.3

An investor should promptly notify the relevant Broker, Custodian or IDSX where:

• (a) a wallet is lost;
• (b) a wallet is compromised;
• (c) wallet control changes;
• (d) an unauthorised transaction occurs; or
• (e) information associated with the wallet becomes materially inaccurate.

46.1

IDSX may, where reasonably necessary:

• (a) approve or reject wallets;
• (b) require additional wallet verification;
• (c) restrict transfers;
• (d) require enhanced due diligence;
• (e) block or suspend wallets;
• (f) require reconciliation;
• (g) require technical changes;
• (h) require an independent review;
• (i) require transfer restrictions to be implemented; or
• (j) take other proportionate action to support compliance and market integrity.

46.2

IDSX may impose conditions on the use of particular:

• (a) blockchain networks;
• (b) wallet types;
• (c) custody arrangements;
• (d) transfer mechanisms; or
• (e) digital securities infrastructures.

47.1

IDSX may specify which blockchain or distributed ledger networks may be used for listed digital securities.

47.2

IDSX may consider:

• (a) network security;
• (b) transaction finality;
• (c) operational resilience;
• (d) governance;
• (e) technical maturity;
• (f) transaction costs;
• (g) smart contract functionality;
• (h) compliance functionality;
• (i) chain history; and
• (j) ability to support IDSX requirements.

47.3

Approval of a blockchain network does not constitute endorsement of the network or its native token as an investment.

48.1

Wallet compliance systems should be designed so that personal information is not unnecessarily published on a public blockchain.

48.2

Identity and compliance information may be maintained off-chain and linked to wallets through controlled records or compliance attributes.

48.3

Processing of personal information must comply with applicable privacy and data protection requirements.

49.1

The use of blockchain technology must not be used to conceal the identity of a person where identification is required under applicable law or IDSX Rules.

49.2

The use of multiple wallets does not remove a person’s obligations relating to:

• (a) beneficial ownership;
• (b) investor eligibility;
• (c) sanctions;
• (d) AML/CFT;
• (e) disclosure of substantial holdings; or
• (f) other applicable ownership requirements.

50.1

A person must not use:

• (a) multiple wallets;
• (b) nominees;
• (c) smart contracts;
• (d) bridges;
• (e) wrapped tokens;
• (f) cross-chain mechanisms;
• (g) private transactions; or
• (h) another technical arrangement,

for the principal purpose of circumventing an IDSX Rule or applicable legal restriction.

50.2

IDSX may consider the substance and beneficial ownership of a transaction rather than only the blockchain address or technical form of the transaction.

51.1

An IDSX-listed digital security must not be bridged, wrapped or represented on another blockchain unless the relevant structure has been approved by IDSX.

51.2

An approved cross-chain arrangement must preserve:

• (a) total authorised token supply;
• (b) ownership integrity;
• (c) investor eligibility controls;
• (d) sanctions controls;
• (e) transfer restrictions;
• (f) reconciliation; and
• (g) legal rights attached to the security.

51.3

A wrapped or bridged representation must not result in duplicate economic claims to the same underlying security.

52.1

A third party must not create an unauthorised wrapped, synthetic or derivative representation purporting to represent an IDSX-listed digital security in a manner that suggests it is an official IDSX security.

52.2

IDSX may take action where an unauthorised representation creates a material risk of investor confusion or market integrity concerns.

53.1

A blockchain fork does not automatically create an additional legally recognised security.

53.2

Where a blockchain fork produces duplicate technical token balances, only the representation recognised under the relevant legal and IDSX framework will constitute the official listed digital security.

53.3

Migration to another blockchain or smart contract must comply with the IDSX Digital Securities Rules and applicable continuing listing requirements.

54.1

Nothing in these Rules determines legal ownership solely by reference to possession of a private key or control of a wallet address.

54.2

Legal ownership must be determined in accordance with:

• (a) applicable law;
• (b) the issuer’s legally recognised securities register;
• (c) applicable custody or nominee arrangements;
• (d) settlement records; and
• (e) the legal structure applicable to the relevant digital security.

54.3

Where an inconsistency exists between an on-chain record and the legally recognised securities record, the matter must be investigated and resolved under the applicable legal and IDSX framework.

55.1

Terms defined in the IDSX Market Rules or another applicable IDSX Rule have the same meaning in these Rules unless the context requires otherwise.

55.2

For the purposes of these Rules:

• “Approved Wallet” means a wallet that has been approved for holding or transferring IDSX-listed digital securities.
• “Digital Security” means a security or legally recognised interest in a security represented using distributed ledger, blockchain or similar digital technology.
• “Self-Custody Wallet” means a wallet for which the investor directly controls the relevant private key or equivalent access mechanism.
• “Custodial Wallet” means a wallet controlled by a Custodian or other intermediary on behalf of one or more investors.
• “Omnibus Wallet” means a wallet through which digital securities attributable to multiple investors are held collectively.
• “On-chain Transfer” means a transfer recorded on the relevant blockchain or distributed ledger.
• “Verified Holder” means a person or entity whose identity and applicable eligibility status have been established in accordance with the IDSX Rules.

56.1

IDSX may amend these Rules in accordance with applicable law, regulatory requirements and IDSX rule amendment procedures.

56.2

IDSX may issue additional:

• (a) technical standards;
• (b) wallet standards;
• (c) blockchain network requirements;
• (d) transfer-control specifications;
• (e) cybersecurity requirements;
• (f) implementation procedures; or
• (g) guidance,

in connection with these Rules.

International Digital Securities Exchange WALLET & ON-CHAIN TRANSFER RULES Draft for Regulatory Development