As described in Section A.2. of the prospectus.
At any point in time, a Tokenholder may redeem his Stock Certificate Token and claim the Underlying.
The redemption request can be placed by the Tokenholder directly in a Smart Contract with the procedure being further explained in detail on the webpage of the Issuer and in the Terms and Conditions. Redemption requests are executed regularly, at a minimum once a month or more often whenever there are redemption requests corresponding to redemption amounts exceeding €100,000.
To request a redemption via the smart contract, follow the steps below:
- View the token smart contract in the relevant blockchain explorer. Token addresses may be found here.
- Connect to the blockchain explorer with the wallet/address which is holding the tokens to be redeemed
- Browse to the Write tab and scroll down to the
requestRedemptionfunction - In the
_assetTokenAmountfield, enter the amount of token you wish to redeem (in 18 decimal places): 1 token = 1000000000000000000- Note there is a minimum redemption amount of 1 token enforced by the smart contract
- The
_destinationfield may be left empty. Redemptions are automatically sent to the requesting address. - Click
Writeand confirm the transaction in your wallet.
The redemption request will be processed in accordance with the minimum amount above (currently €100,000). Contact help@swarm.com to cancel a redemption request, check in on the status of a redemption request, or if you have any questions about this process.
The Token-Trustee is responsible to monitor the Smart Contract and will notify the Custodian about Redemption requests and Stock Certificate Tokens having been placed for Redemption. Upon receipt of a redemption request and the corresponding Stock Certificate Token, the Underlying is delivered by the Custodian to the Tokenholder’s account with the Custodian or another bank/broker (Redemption). Once the Token-Trustee receives confirmation by the Custodian that the Underlying has been transferred to the account of the Stock-Tokenholder, the Token-Trustee grants the redemption request, which triggers the burning of the corresponding Stock Certificate Tokens in the Smart Contract (Burning).
Dividends and Debt Service must be claimed by Tokenholders before initiating a redemption request. The Tokenholder will be alerted prior to finalizing the redemption request that he has to claim the Dividends and Debt Service. Dividends and Debt Service not claimed in time will be allocated proportionally to all Tokenholders with the same Underlying.
The Redemption process on the timeline is shown in the following
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- For the Stock Tokens held the Stock-Token-Holder claims all outstanding stable coin dividends from the Dividend Smart Contract
- Stock-Token-Holder issues a redemption request within the smart contract to receive Underlying stocks in exchange for the Stock Tokens
- Token-Trustee receives the redemption request via the smart contract and initiates a transfer with the Custodian of the Underlying into the account specified in the request
- Custodian transfers the Underlying to the account of the Stock-Token-Holder
- Custodian informs the Token-Trustee of the successful transfer
- Token-Trustee confirms transfer within the smart contract, which triggers the burning of the respective Stock Tokens