DEEP: DLT Securities Registers in France (Shared Electronic Registration Systems)

When you need to prove, without ambiguity, who holds a security, at what point in time and through which chain of entries, a “traditional” register can quickly become a point of friction: delays, double entries, conflicting versions, difficulty auditing. It is precisely to meet this need for evidence, traceability and integrity that French law has, for several years now, regulated the shared electronic registration system, better known by its French acronym: DEEP.

The DEEP: a shared register, enforceable against third parties and designed for trust

A shared electronic registration system is a method of keeping and storing information based on distributed ledger technology. In practice, the information is not centralised on a single server: it is recorded in a system where recording, storage and consultation rely on technical mechanisms designed to guarantee the consistency and unalterability of the entries.

The DEEP is more than a “technical innovation”. In France, it sits within a precise legal framework, because it can be used to represent and transfer certain financial securities. In other words, in specific cases a DEEP can serve as the register for the ownership and movements of securities, with an approach based on evidence and audit.

The French legal framework for DEEPs: the key texts

The DEEP framework rests in particular on Order (ordonnance) No. 2017-1674 of 8 December 2017, on the use of a DEEP for the representation and transfer of financial securities. This text laid the foundations for using a shared register as a means of representing and transferring certain securities, in conjunction with the rules of the Monetary and Financial Code. Since 30 December 2024, Article L. 211-3 of the Monetary and Financial Code (in French) refers to “distributed ledger technology”, registration in which takes the place of book-entry registration in an account; the regulatory provisions, such as Article R. 211-9-7, still use the concept of a DEEP.

This foundation was then supplemented, at regulatory level, by Decree No. 2018-1226 of 24 December 2018. This decree sets out minimum requirements and inserts into the Monetary and Financial Code operational provisions that are decisive when securities are recorded in a DEEP.

Minimum requirements: what a DEEP must make possible

Where a DEEP is used to record securities, it must be designed and implemented to guarantee three imperatives, which structure any compliance analysis:

1) Recording and integrity of entries
The system must ensure that each entry is correctly recorded and that it retains its integrity over time. This requirement concerns the reliability of the register as a means of evidence.

2) Identification of the essential elements of the holding
The DEEP must make it possible, directly or indirectly, to identify the owners, the nature of the securities recorded and the number of securities held. This ability to identify determines the legal robustness of the system.

3) A business continuity plan and external data storage
The entries are covered by an up-to-date business continuity plan, including in particular an external system for periodic storage of the data. The register is only of value if it withstands incidents, outages and crisis scenarios.

Finally, when securities are recorded in a DEEP, the owner can obtain statements of the transactions that concern them. This option improves the readability and auditability of movements.

Blockchain and DEEP: two close concepts, but not interchangeable

Blockchain and DEEP are often confused. The distinction matters.

Blockchain is a family of distributed ledger technologies that organises information as chained blocks. A DEEP, by contrast, is a broader legal category: it is a shared electronic registration system meeting technical and functional criteria compatible with the requirement of integrity and evidence, without imposing a single architecture.

In practice, a blockchain can constitute a DEEP if, and only if, its implementation meets the applicable requirements. Conversely, a DEEP can rely on other distributed ledger architectures, provided that the expected outcome in terms of identification, integrity and business continuity is achieved.

Which securities can be recorded in a DEEP?

French law regulates recording in a DEEP by reference to specific categories of securities and situations. For securities not admitted to the operations of a central securities depository, the law offers a choice between book-entry registration in an account and registration by means of a distributed ledger, under the conditions laid down by the applicable texts.

In practice, these include in particular:

• securities not admitted to the operations of a central securities depository, according to the rules on representation and record-keeping;
• units or shares in collective investment undertakings (organismes de placement collectif), under regulated conditions;
• situations where the organisation of entries makes it easier to transfer and prove transactions, while complying with record-keeping obligations.

Within its scope, the Decree of 24 December 2018 also sets out the operational consequences of recording in a DEEP, in particular to allow trading in registered form on a trading platform when the securities are recorded in a DEEP, in the cases provided for.

Who bears responsibility when securities are recorded in a DEEP?

Responsibility is never a matter for slogans. It follows from the allocation of roles: the issuer has obligations relating to record-keeping or registration and may, in certain cases, use an agent to carry out the record-keeping or administration of the entries in practice.

Where registration falls to the issuer and an agent is appointed, the regulations require public disclosure: the issuer publishes in the French official bulletin of mandatory legal notices (Bulletin des annonces légales obligatoires) the agent’s name and address, together with the category of securities concerned. This transparency is intended to prevent any opacity about the identity of the operator administering the entries.

In all cases, one principle applies: a DEEP’s compliance is not presumed. It is demonstrated through the architecture, the procedures, the governance and the ability to produce consistent evidence.

Pledges and DEEP: what the law provides

A question that often comes up: can securities recorded in a DEEP be pledged? In principle, yes, because the law has specifically provided for rules on the pledge (nantissement) of financial securities, including when they are recorded in a shared electronic registration system.

The Monetary and Financial Code governs the formalities of the pledge declaration (déclaration de nantissement) when the securities are recorded in a DEEP. In particular, it provides that the declaration must be dated and contain identifying information (parties, secured claim, identifying details of the securities or of the IT identification process, nature and number of the securities initially recorded).

In addition, where the issuer (or its agent) responsible for recording the securities in the DEEP is not an entity authorised to receive repayable funds from the public, the law requires a protected channel for cash flows: the income and proceeds paid in cash in respect of these securities must be credited to an account opened with an authorised intermediary or a credit institution, in accordance with the applicable texts.

This architecture illustrates a consistent approach: the DEEP does not create a “parallel law”. It ties in with existing mechanisms (account keeping, security interests, cash channels) and, in most cases, imposes technical and organisational conditions to preserve the legal certainty of transactions.

Takeaway: the DEEP as a legal tool for evidence and the organisation of securities

In France, the DEEP sits within a structured legal framework: it is neither a fad nor a mere synonym for blockchain. In principle, it is used to represent and transfer securities in the cases provided for, while meeting minimum requirements: integrity of entries, identification of owners and securities, business continuity, and the ability to report transactions.

For the players concerned, the challenge is not to “use a distributed ledger”. The challenge is to demonstrate that the system in place generally delivers a level of reliability and security compatible with sensitive legal transactions: ownership of securities, transfers, and security interests such as pledges, subject to special cases and to the conditions of application specific to each category of securities.