iSTOX, a blockchain-based platform, is now the first digital securities issuance, custody, and trading platform, licensed in Singapore. iSTOX recently “graduated” from the Monetary Authority of Singapore’s Fintech Sandbox program and has received regulatory approval to operate and provide digital asset issuance and trading. This is a first for a major securities regulator anywhere.
Singapore has emerged as a leading Fintech hub largely due to government support and the explicit engagement of the leading securities regulator.
The distributed ledger tech (DLT) capital markets platform officially graduated on 1 Feb 2020. iStox is operated by ICHX Tech Pte Ltd (ICHX) and is now a recognized market operator (RMO) and a capital markets services (CMS) licensee. iStox may now issue any type of security without limitation to the size of the issuance.
Danny Toe, founder and CEO of ICHXA, called the approval a big step forward for digital assets:
“This is a big milestone both for iStox and for the financial industry as a whole. We started this just over two years ago as a vision of how investing could be done better. Today we truly emerge as a 21st-century financial institution.”
iSTOX Chief Operating Officer Darius Liu said that while capital markets have seen many changes in the past years the core technology has not really changed since the advent of electronic trading decades ago.
“We are proud to deliver an operational platform that can address market demand while meeting the robust regulatory standards and licensing conditions set by MAS,” said Liu.
MAS Chief Fintech Officer Sopnendu Mohanty said iStox’s graduation was indicative of the success of the Fintech Sandbox’s program and MAS’s approach to Fintech. Mohanty said this demonstrates how “proportional regulations through sandbox experimentation can foster innovation and bring new benefits to consumers and the financial industry.”
He added that MAS looks forward to furthering collaboration with innovators as they build a “smart financial center.”
Chew Sutat, Senior Managing Director and Head of Global Sales & Origination at Singapore Exchange (SGX), also provided a comment on the news, saying that capital markets across the world are evolving at a rapid pace and those that embrace innovation and set new benchmarks will prove successful.
“Singapore has long been a world-class fintech hub, known for its innovative business environment. This recognition of iSTOX will further elevate Singapore’s capital markets position globally.”
iStox leverages smart contracts and DLT to streamline the issuance and trading of securities. The company describes the process as bringing “private capital markets into the 21st century.” iStox expects to remove barriers to matching investment opportunities to a broader pool of investors in the private markets. iSTOX claims to be a more flexible, affordable and “inclusive alternative, and offers investment options that were previously inaccessible.”
Chief Commercial Officer Choo Oi Yee said they are now onboarding accredited and institutional investors while they build the pipeline of offerings across different asset classes.
iStox had key backing of various entities from the beginning of its launch. The SGX is an investor in the company. Heliconia, a subsidiary of Temasek Holdings, is as well. Japan’s Tokai Tokyo Financial Holdings, Thailand’s Kiatnakin Phatra Financial Group and South Korea’s Hanwha Asset Management, all backed the digital asset marketplace.
iStox shared the following milestones in its existence:
- 2018, SEPTEMBER: Singapore Exchange, Asia’s leading international multi-asset exchange and Heliconia, a subsidiary of Temasek Holdings focused on investing in fast-growing companies, agree to join ICHX as investors.
- 2019, MAY: ICHX is accepted into the MAS Fintech Regulatory Sandbox.
- 2019, SEPTEMBER: Kiatnakin Phatra Financial Group, a prominent Thai investment bank, and pioneering private wealth business, agrees to join ICHX as an investor.
- 2019, OCTOBER: Tokai Tokyo Financial Holdings (via subsidiary Tokai Tokyo Global Investments), a prominent Japanese financial services firm, agrees to join ICHX as an investor.
- 2019, NOVEMBER: ICHX completes the world’s first issuance, custody and trading of a regulated DLT-based security on a single integrated platform.
- 2020, JANUARY: Hanwha Asset Management, South Korea’s leading comprehensive asset management company, agrees to join ICHX as an investor.
- 2020, FEBRUARY: ICHX graduates from MAS’ sandbox as a regulated RMO. ICHX is also awarded a CMS license to carry out dealing in capital markets products and to provide custodial services.