OCBC, Singapore’s second-largest bank mulls a long-term strategic partnership with blockchain digital asset marketplace ADDX to distribute its first tokenised equity-linked structure note accredited to the investors. The fixed coupon note was introduced in May and is the first product issued by a Singapore financial institution that would land on ADDX’s ledge. Through the launch of the product, a long-term partnership is born which also paves the way for the introduction of a wide variety of investment products in the future.
What makes Tokenised structure notes so unique?
Fixed coupon notes are equity-linked structure notes that pay regular distributions at pre-arranged intervals, with a clause that no exceptional event has occurred according to the provisions of the notes. The notes would provide a way for the investors with a specific view of the price movement of underlying securities in order to produce additional cash flow along with gaining potential exposure to the underlying security or securities. The note is linked to shares in Underlying Share, a US-listed tech giant. The note was launched on the ADDX platform at a minimum size of USD 50,000.
OCBC Bank’s Head of Global Treasury, Mr. Kenneth Lai on reaching a strategic partnership and launching notes stated that it is important to innovate and find new channels for the products even though the bank has achieved a thorough stable of treasury products including sustainability-linked interest rate swaps, structured deposits, cross-currency swaps, and green bonds. “We are therefore pleased to be the first Singapore bank to offer an equity-linked structured note in tokenised form on ADDX. It is the first innovation resulting from a longer-term partnership with ADDX, and we are hopeful that it will lead to more diverse product offerings that are relevant and appealing to the global accredited investor base of ADDX”, stated Mr. Kenneth Lai
OCBC is partnering with new digital players like ADDX and deepening its relationship with important players in the industry which would increase its customer proposition and tap into a wider investor base. Tokenising the fixed coupon note will allow more authorized investors to ingress the product. ADDX, which is headquartered in Singapore aims to make investing fairer by democratizing private markets. ADDX reduces involvement in the issuance, distribution, and custody of private markets by using smart contract technology and blockchain.
The ability to fractionalize investments in a commercially viable and scalable manner comes from the efficient use of digital securities. ADDX has listed more than 70 deals on its platform and worked with companies like Partners Group, Hamilton Lane, Singtel, and Investcorp. Ms. Oi-Yee Choo, the Chief Executive Officer of ADDX emphasized that structured products are devised to provide investors with unique risk and return properties that won’t be available through traditional investments, this is also an appealing option for investors considering yield-generating options in the current economic conditions.
“These products can potentially offer higher returns than bonds or fixed deposits – they typically include a combination of a fixed-income component and a derivative component providing exposure to the performance of underlying assets such as stocks or commodities”, stated Oi-Yee Choo.
About OCBC Bank
Established in 1932, OCBC Bank is the longest-established Singapore bank. The financial institution is formed from the merger of three Singapore banks and grew to be the second-largest financial services group in Southeast Asia. The bank offers a wide variety of financial services in wealth management services and commercial banking such as investment, private consumer, corporate, and transaction banking to insurance, asset management, treasury, and stockbroking services in its key markets like Indonesia, Greater China, Singapore, and Malaysia. OCBC currently has representative offices in 19 countries with more than 420 branches.