Companies searching for an option to raise private capital from qualified investors can tap on DBS to securitise real and financial assets into digital tokens, known as “Security Tokens”, for listing and trading on DBS Digital Exchange (the “Exchange”).

What is a Security Token Offering?

Defining what is a Security Token Offering requires the understanding of what is a Security Token. Security Tokens are the digitalisation of valuable assets into fragmented securities representing right of ownership. These are stored using blockchain technologies in the form of regulated securities. Picture that of a digitalised securities offering in a manner like that of an official certificate of ownership issued for securities. Such a feature allows issuers to access alternative fundraising from qualified investors through tokenising their assets, allowing them to function as digital representation of assets while taking advantage of security, transparency, regulatory obligations, and automations such as smart contracts which blockchain technologies offer.

Through tokenisation and digitalisation, issuers can monetise illiquid assets and transform them into tradable assets. This additionally allows the fragmentation of ownership by turning the now digitalised asset into sizeable and tradeable tokens. Investors on the other hand gain access to investments in assets that were traditionally high in value and high monetary barrier to entry. Both spectrums result in an increase in liquidity with the new avenues of investments made available through usage of security tokens.

The listing and trading of Security Tokens on the Exchange is regulated under the Securities and Futures Act 2001 (“SFA”) and Security Tokens is a distinct product class from Digital Payment Tokens (such as cryptocurrencies) which is regulated under separate legislation (i.e. the Payment Services Act 2019). 

Further, please note that (a) the issuers on the Exchange are not subject to disclosure and prospectus requirements under Part XIII of the SFA; (b) the Exchange’s admission of issuers are not subject to the MAS’ oversight; and (c) DBS Group entities may participate on the organised markets operated by the Exchange. Please refer to the Exchange’s disclosure to participants for further information.