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Digital Securities

OCBC Bank and ADDX Launch Tokenized Structured Note

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In a landmark move towards digitization and expanding access to diverse investment products, OCBC Bank the longest established Singapore bank, formed in 1932, has formed a strategic alliance with ADDX, the renowned global private market exchange. The partnership marks a significant milestone in the financial sector as it saw the launch of the first-ever tokenized equity-linked structured note in early May, issued by a Singapore bank and featured on the ADDX platform.

The three-month fixed coupon note serves as the initial product of the collaboration, setting a precedent for a broader range of investment offerings expected to emanate from the partnership. The note is tied to a US-based tech behemoth, commonly referred to as the “Underlying Share,” and debuted on the ADDX platform with a minimum size of US$50,000.

An equity-linked structured note, such as a fixed coupon note, offers regular payments at specific intervals, provided no exceptional or triggering event occurs as per the note's stipulations. These notes offer investors a strategy to generate additional income and gain potential exposure to the underlying securities, making them an attractive investment option.

In this digital age, OCBC Bank's collaboration with innovative digital platforms like ADDX allows the bank to enhance its customer experience and tap into a larger investor base. This also makes it possible for accredited investors to gain access to the product through its tokenized form, fostering greater inclusivity in financial participation.

With its headquarters based in Singapore, ADDX aims to democratize private markets, fostering fairer investment practices. They leverage blockchain and smart contract technology to streamline the issuance, custody, and distribution of private market products, leading to fractionalized investments that are both scalable and commercially viable.

Thus far, ADDX has listed more than 70 deals on its platform, collaborating with established brands like Hamilton Lane, Partners Group, Investcorp, Singtel, and CGS-CIMB, and entities under Temasek, such as Mapletree, Azalea, SeaTown, and Fullerton Fund Management. Its offering spans across a range of asset classes including private equity, hedge funds, venture capital, private credit, real estate, debt, and structured products.

Kenneth Lai, OCBC Bank's Head of Global Treasury, expressed optimism about the collaboration, stating that while they already boast a robust stable of treasury products, it is crucial to continually innovate and explore new distribution channels. The partnership with ADDX, he shared, is expected to lead to more diverse product offerings that appeal to the global accredited investor base.

The CEO of ADDX, Ms Oi-Yee Choo, also commented on the alliance, noting that structured products offer unique risk and return characteristics and are an attractive investment option. She added that ADDX and OCBC Bank's partnership is just the beginning of a wider collaboration, intending to explore the issuance of commercial papers in the future.

OCBC Bank and ADDX's collaboration heralds an innovative and exciting phase in the realm of financial investments, paving the way for novel investment opportunities and improved financial accessibility.

Daniel is a big proponent of how blockchain will eventually disrupt big finance. He breathes technology and lives to try new gadgets.