Singapore Approves Blockchain-Based Bond Exchange
Singapore-based fintech BondEvalue said today it has been approved as a Recognised Market Operator (RMO) by the Monetary Authority of Singapore (MAS).
It operates BondbloX Bond Exchange (BBX), the world’s first blockchain-based bond exchange, and aims to bring trading of a wide range of fixed-income securities to the mass market across the region.BondEvalue officially graduated from the MAS’ regulatory sandbox on 1 October 2020. The move means that BondEvalue has successfully concluded proof of technology and business model. It is now no longer bound by restrictions such as limits on trading volume and disclosures specific to the sandbox model.
A sandbox is a regulatory construct which provides fintech players with a faster option to test innovative financial products and services in the market under regulatory scrutiny.
Rahul Banerjee, Founder and CEO of BondEvalue, said: “Getting the MAS’ greenlight is a big deal for us, our partners and our ecosystem. It will help to accelerate engagements with potential partners.
“Our experience affirms the success of the MAS’ sandbox in allowing fintechs like us to innovate, experiment with disruptive technology and trade on a limited scale without significant risks to our investors and ourselves.”
Now, bonds for everyone
While it was still in the sandbox, BondbloX successfully carried out the world’s first blockchain-based bond trade in August 2020 and the first-ever coupon payment on blockchain in September.
BBX allows for bonds to be traded in smaller sizes of US$1,000 unlike typical bond trades of at least US$200,000. This leads to better access and better diversification opportunities for a market that is typically inaccessible except to more wealthy investors.
The blockchain technology makes trading highly transparent and more cost-effective. Settlement on BBX is on a T+0 basis, that is within seconds instead of the normal two-day settlement cycle, thereby reducing counterparty settlement risks for investors.
2020 and beyond
Mr Banerjee said: “Our vision of extending bond trading from Wall Street to Main Street is becoming a reality. We are committed to helping investors trade bonds transparently.”
BondEvalue’s Initial Launch Partner UOB Kay Hian, part of the UOB Group and one of Asia’s largest brokerages, and its first member, multi-family office Taurus Wealth Advisors, will ramp up to bring more investors to the platform. BBX is integrated with Northern Trust as the Designated Custodian and works closely with external counsel Linklaters to bring BondbloX alive.
BondEvalue is founded by Mr Banerjee, a former bond banker with experience at Citibank, Credit Suisse, Nomura Securities and Standard Chartered Bank, and Mr Rajaram Kannan, whose previous role was Senior Vice President, Treasury and Markets Technology at DBS Bank.
BondEvalue had completed its pre-Series A funding during the sandbox. The investments came from Singapore-based venture funds, Potato Productions, owned by Mr Lee Han Shih, and Octava, a family office with investments in diverse industries including real estate, fintech and lifestyle, along with a few other family offices.
From dream to reality
Investors around the world can trade on BBX via web and mobile devices by opening an account with their banks, wealth managers, family offices or robo-advisors, subject to individual country restrictions on bond trading. In Singapore, BBX is open to accredited and institutional investors.
Aside from operating a bond exchange, BondEvalue manages a premium bond market data service which is subscribed by thousands of individual bond investors. This service is provided through web and mobile apps on Apple Store and Google Play Store. Investors can access two-way bond prices, bond price yield graph, bond reference data and bond-focused news.
Mr Banerjee added: “The last four years of hard work and effort from the team has culminated in a more transparent and accessible bond market today.”
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