Taiwan Takes a Bold Step into Security Token Offerings
In a groundbreaking move for the Taiwanese financial sector, the Financial Supervisory Commission (FSC) granted Cathay Securities the first-ever security token offering (STO) license. This historic moment, happening on November 9, 2023, sets a precedent as the country dives into the world of tokenized assets, fusing finance and technology.
Sunshine Green Yield: The Details and Benefits
Cathay’s inaugural STO, dubbed “Sunshine Green Yield,” isn’t just your average bond; it comes with a green twist! Investors can play a part in shaping eco-friendly initiatives while also enjoying an initial annual interest rate of 3.5%. With a principal amount of 30 million New Taiwan dollars (approximately $930,000), these bonds mature in six years, offering viable returns and sustainability.
What Makes This Offering Unique?
Participating in the Sunshine Green Yield enables enterprise owners to access green electricity at favorable rates while supporting environmental, social, and corporate governance (ESG) projects. Interest rates can escalate to as much as 5.8% per year—proof that saving the planet can also save your wallet!
Trading Details: When and Where to Buy
Mark your calendars! Trading for the Sunshine Green Yield bonds is set to commence on December 12 on Cathay’s specialized STO exchange platform. Investors eager to dive into this eco-conscious venture should prepare for an exciting trading spree!
FSC’s Regulations: Restrictions and Opportunities
Since reclassifying tokenized assets as securities back in 2019, the FSC laid down some ground rules for STOs. Here’s a quick rundown:
- Issuers face a fundraising limit of $930,000.
- A maximum of two STOs per year is permitted.
- Offers are exclusively available to enterprises and accredited investors.
- Accredited investors can only purchase up to $9,300 worth of STOs.
While there are restrictions, the path is open for financial institutions looking to explore this innovative approach.
Cathay’s Innovative Partnership
To ensure credible evaluations of STO interest rates, Cathay Securities has teamed up with Numerix and Professor Ye Zongying from National Chung Hsing University. Together, they’ve developed Taiwan’s first STO evaluation model, boasting an impressive 95% accuracy in predicting the default risk for small and medium-sized enterprises. This partnership showcases how collaboration can foster innovation in finance!
About Cathay Securities
Established in 2004, Cathay Securities stands as one of Taiwan’s financial powerhouses, catering to a vast clientele of investors and brokerage clients. Their commitment to not only financial success but also sustainable initiatives highlights their forward-thinking strategy.
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