A transferable security is a financial instrument capable of widespread and impersonal trading in a market. That classification does not depend on the name given to it or the technological medium in which it is represented, but on its nature and the rights it incorporates, and it is what determines which regulations apply to the issuance.
Transferable securities are rights of a patrimonial nature, such as shares, bonds or obligations, which due to their legal configuration and transfer regime can circulate in a generalized and impersonal manner in a financial market (Art. 2 of Ley 6/2023). Represented on blockchain and registered through an ERIR, they are security tokens.
For a company raising capital, the classification has consequences: if you issue a transferable security, securities market regulations apply (prospectus or exemption, marketing rules and, on blockchain, an entity that keeps the register). The commercial name changes nothing; the rights it incorporates are what count.
Legal definition: what Ley 6/2023 says
The Ley 6/2023, de los Mercados de Valores y de los Servicios de Inversión (LMVSI) sets out the definition in its Article 2.1.a). Three requirements follow from it:
- Right of a patrimonial nature: profits, interest or repayment of principal.
- Whatever its name: calling it “token” or “certificate” does not take it out of the category.
- Capable of generalized and impersonal trading: it is standardized and transferred to undetermined third parties without renegotiating each transaction.
The law excludes payment instruments and clarifies (Art. 2.2) that the category remains when the security is issued or recorded with distributed ledger technology. The concept matches that of Article 4.1.44 of MiFID II. The ESMA guidelines applicable from 18 May 2025 summarize it in three cumulative criteria: not being a payment instrument, forming part of a class of securities and being negotiable on the capital market.
Types of transferable securities, with examples
The table includes the categories of Article 2.1.a) of the LMVSI, the promissory notes of Article 5.2 and two instruments that are often confused with them.
| Type | Examples | Classification under the LMVSI |
|---|---|---|
| Shares and equivalents | Shares in a public limited company, listed or not; depositary receipts over shares | Transferable security (Art. 2.1.a) 1st) |
| Debt | Bonds, debentures, securitization bonds and other forms of securitized debt | Transferable security (Art. 2.1.a) 2nd) |
| Promissory notes | Corporate promissory notes with maturity of less than 365 days | They are considered transferable securities (art. 5.2) |
| Securities with the right to acquire or sell others, or settled in cash | Warrants, index-linked certificates | Transferable security (art. 2.1.a) 3rd) |
| Fund units, including listed ones (ETF) | Investment funds, ETFs, venture capital entities | Financial instrument of its own category (art. 2.1.c) |
| Money market instruments | Treasury bills, certificates of deposit | Financial instrument of its own category (art. 2.1.b) |
The last two rows are financial instruments, not transferable securities in the strict sense, although article 2.4 applies the same rules to them with the necessary adaptations. More detail in what is a financial instrument and in what is a promissory note.
What is not a transferable security
A non-transferable security is a right that does not meet those requirements or to which the law denies that status. The most common cases:
- Interests in a limited liability company. Under article 92.2 of the Ley de Sociedades de Capital, they shall in no case have the status of securities. An SL cannot tokenize its capital as a transferable security (see SL or SA for issuing).
- Bilateral loans, including participatory ones: contracts with a specific lender.
- Bank deposits and payment instruments.
- Bespoke contractual rights, such as a co-investment agreement signed one to one.
- Tokens without financial rights, which only grant access to a service: they may fall under the MiCA Regulation.
Not being listed is not the same as not being transferable: shares of an unlisted SA are still transferable securities (art. 92.1 of the same law).
“Cash and transferable securities” in accounting
The expression appears in finance manuals and in balance sheets of several Latin American countries to group cash with immediately liquid investments (cash and marketable securities). In the Spanish Plan General de Contabilidad the equivalent line item is “Cash and other equivalent liquid assets” (heading B.VII of assets in the normal and abbreviated models; B.VI in the SME model). Under rule 9.ª on preparing the annual accounts of the PGC (rule 8.ª on recognition and measurement in the SME model), it includes cash, demand deposits and instruments convertible into cash with a maturity of no more than three months when acquired, without significant risk of change in value and within normal treasury management (account 576).
Other short-term securities go to “Short-term financial investments” (accounts 540 for equity instruments and 541 for debt securities; if the issuer is a group or associate company, they go to “Investments in group and associate companies, short-term”, accounts 530 and 531). On the issuer’s side, issued debt is shown as a financial liability (“bonds and other transferable securities”) and ordinary shares as equity. There are exceptions: shares that oblige the company to deliver cash, such as those redeemable at the investor’s option or those carrying a mandatory dividend, are a financial liability, and bonds convertible into a fixed number of shares are split into a liability component and an equity component.
From transferable security to security token
The LMVSI allows transferable securities to be represented by certificates, book entries or distributed ledger technology (art. 6). The latter route requires three elements:
- An issuance document that identifies the securities and describes the registry system and its governance (art. 7).
- An entity responsible for the administration of registration and registry (ERIR), authorized for the activity under article 126.a) of the law (art. 8.4, developed by Real Decreto 814/2023).
- The first registration in the system, the moment at which the securities are constituted (art. 10).
Thus, a transferable security on blockchain is a security token: the same instrument with another registry. The first ERIR authorized in Spain was URSUS-3 Capital, A.V., in November 2024 (see what is an ERIR). HokenFi provides the technology; the regulated steps are carried out by authorized entities.
Before issuing: three checks
- Can your company issue that security? An SL seeking capital must first convert into an SA; for debt, it can issue bonds.
- Is the right standardized and transferable? Then design it from the outset as a transferable security.
- Does the offer need a prospectus? It depends on the amount and the recipients. The amount exemption is 12 M€ over 12 months from 5 June 2026 (Listing Act); the adaptation of Spanish law is still pending according to the CNMV.
Is what you want to issue a transferable security and do you need to know how to bring it onto blockchain? Run the issuance diagnosis (2 min) or request a proposal.
This content is informative and educational. It does not constitute legal, tax, or investment advice. Check the current version of each regulation in the BOE and on EUR-Lex.
HokenFi is a software and infrastructure provider; it does not provide regulated services (CASP, ESI, EAF, or ERIR). This article is informative and does not constitute financial or legal advice.
Frequently asked questions
What are transferable securities?
They are rights with economic content, such as shares, bonds or debentures, which, due to their legal configuration and transfer regime, can circulate generally and impersonally in a financial market. In Spain they are defined by article 2.1.a) of Ley 6/2023, which excludes payment instruments. The category does not depend on the name of the instrument or on whether it is represented on paper, in book entries or on blockchain.
What is a non-transferable security?
It is a right that does not meet the requirements of a transferable security: it is not standardized, it cannot be transferred impersonally or the law denies it that status. Common examples are interests in a limited liability company (art. 92.2 of the Ley de Sociedades de Capital), bilateral loans, bank deposits and payment instruments.
Is every share a transferable security?
Shares in a public limited company are, whether listed or not: article 92.1 of the Ley de Sociedades de Capital gives them the status of securities. Interests in a limited liability company are not, because article 92.2 provides that in no case shall they have the status of securities. Therefore, to issue tokenized capital, the company usually has to be an SA.
What do cash and transferable securities mean in accounting?
It is a line item that groups cash with immediately liquid investments. In the Spanish General Accounting Plan its equivalent is Cash and other equivalent liquid assets: cash, demand deposits and instruments convertible into cash with a maturity not exceeding three months at acquisition, without significant risk of change in value and forming part of normal cash management. Other short-term securities are classified as short-term financial investments.
Does a tokenized transferable security need an ERIR?
Yes. When a transferable security is represented by distributed ledger technology, the issuer must designate in the issuance document an entity responsible for administering the registration and record-keeping, authorized for that activity (art. 8.4 of Ley 6/2023 and Real Decreto 814/2023). The securities are constituted upon their first registration in the system.
