Issuer-Sponsored Tokens (ISTs): How tokenized securities work

Introduction by Arne Gulstene, Head of Issuer Services, Computershare Canada

In our article “Tokenization of securities: What issuers need to know”, we link to a news release announcing that in the US, Computershare has launched Issuer-Sponsored Tokens (ISTs), a form of tokenized security.

While this initiative has not yet launched in Canada, Computershare remains actively engaged in shaping the future of the Canadian capital markets ecosystem. Through our involvement with the CSA Collaboratory on Tokenization and our ongoing engagement with regulators, exchanges, depositories, issuers, and other market participants, we continue to advocate for policies and market structures that protect issuer and shareholder interests while supporting innovation and modernization.

As discussions around tokenization, digital assets, and next-generation market infrastructure continue to evolve, we are helping inform and influence the regulatory and market frameworks that will underpin the future of securities ownership and capital raising in Canada.

To help issuers stay informed about developments south of the border and better understand how these innovations may influence the broader evolution of capital markets, we've compiled answers to the most frequently asked questions about Issuer-Sponsored Tokens.

What is an Issuer-Sponsored Token?

An Issuer-Sponsored Token (IST) is a digital form of company issued share, administered on a distributed ledger, while maintaining issuer control, transfer agent oversight, shareholder rights, and regulatory compliance.

How do Issuer-Sponsored Tokens differ from wrappers and custody tokens?

When an investor holds an Issuer-Sponsored Token, they are not holding a wrapper, derivative, or third-party tokenized security or beneficial entitlement. They are a registered shareholder, with the same rights as any other registered holder for dividends, voting and corporate actions.

The token is not linked to the share – it is the share.

What are the benefits of tokenized securities for investors?

For investors, the tokenization of securities delivers:

• A new way to hold public equity alongside digital assets in a public wallet
• Global, near‑instant, peer‑to‑peer transfer capability
• Fewer intermediaries between the shareholder and the issuer

It meets the growing demand from digitally native investors without forcing issuers or the market to change how equity fundamentally works.

What are the benefits of Issuer-Sponsored Tokens for issuers?

For issuers, Issuer-Sponsored Tokens offer:

• More choice in how shareholders hold their shares
• Clear visibility into token holders
• Access to new, often global, investor segments

Issuer-Sponsored Tokens give companies a controlled alternative to unauthorized third‑party tokenization that could otherwise impact governance, investor experience, or brand.

How do Issuer-Sponsored Tokens work with DRS?

Issuer-Sponsored Tokens are designed for interoperability. Investors can move freely between:

• DRS and token form
• Token form and DRS
• DRS and brokerage (DTCC), as they do today

Blockchain transfers can occur continuously, while dividends, proxies, and corporate actions initially continue through established processing. That balance allows progress without operational disruption. Over time, distribution of dividends through stablecoins, voting on-chain and distribution of tokens for other corporate actions will be developed.

Are Issuer-Sponsored Tokens regulated?

Issuer-Sponsored Tokens retain transfer agent protections. Tokens can be recovered in cases of fraud or lost credentials. Identity verification, recordkeeping, and investor protection obligations continue to apply.

With Issuer-Sponsored Tokens, the transfer agent, such as Computershare, retains responsibility for the master security holder file.

Regulatory guidance allows that record to be maintained across multiple databases. That enables the transfer agent to connect traditional shareholder records with blockchain activity, while maintaining auditability, oversight, data security and control.

In conclusion

Issuer-Sponsored Tokens are not about replacing today’s capital markets. They are about extending them – securely, responsibly, and in a way that bridges traditional infrastructure with what comes next.

Computershare is not providing, and does not intend to provide, any legal, tax or investment advice.

Let’s talk

If you would like to explore Issuer-Sponsored Tokens for your company, please reach out to your Relationship Manager or contact Computershare.