NOTE: In May of 2021, iSTOX rebranded itself to ADDX.
As part of our ongoing mission of bringing previously out-of-reach investments within reach of more accredited investors, we’re excited to announce iSTOX will soon provide its users access to high quality wholesale bonds in fractionalized bite-sized quantities.
For the first time, iSTOX will facilitate investing into these bonds in amounts smaller than S$200,000 – and, in some cases, for as little as S$10,000 or less – radically expanding the pool of potential investors who have access.
iSTOX Chief Commercial Officer Choo Oi Yee explains:
Q:Why is iSTOX doing this? How will it benefit me?
Oi Yee: Bonds should be a key component of every investor’s portfolio – particularly during uncertain times like these. SGX has over US$1 trillion issued in high quality wholesale bonds. The problem is they are all issued and traded in sizes no smaller than S$200,000. As such, these bonds are out of reach to all but very wealthy and institutional investors. By leveraging our platform to digitise the bonds, we can then provide a wide variety of accredited investors access to select bonds in sizes appropriate to their overall portfolio sizes.
Q: What is fractionalization?
Oi Yee: All securities on the iSTOX platform are digitised, which allows the bonds to be easily fractionalized, or reduced into smaller investment sizes, if the company issuing them wishes. For example, a bond that would normally have a face value of S$200,000 may be made available at smaller investment sizes of S$10,000 or less, allowing the bonds to be far more affordable and appropriate for many investors.
Q: How will this initiative work? How will you facilitate these bond issuances on your platform?
Oi Yee: Companies who have listed their Medium-Term-Note Programme with SGX may now go through a streamlined process with iSTOX to make bonds available in fractional amounts. These issuers may list and issue a bond on iSTOX with their SGX-approved offering documents without a separate listing approval from iSTOX’s Listing Committee. Investors who are accredited investors may invest in these bonds when they sign up to the iSTOX platform.
Q: Can you tell us what your first bond under this program will be?
Oi Yee: We’re currently evaluating a number of potential issuers, and once an issuance is launched, the announcement will be made to all iSTOX users. Do sign up for an iSTOX account to receive these updates and view the offering documents when the issuance is launched.
