Singapore-based fintech BondEvalue has been approved as a Recognised Market Operator (RMO) by the Monetary Authority of Singapore (MAS).
It operates BondbloX Bond Exchange (BBX), a blockchain-based bond exchange that aims to bring trading of a wide range of fixed-income securities to the mass market across the region.
BondEvalue officially graduated from the MAS’ regulatory sandbox on 1 October 2020. The move means that it has successfully concluded proof of technology and business model. It is now no longer bound by restrictions such as limits on trading volume and disclosures specific to the sandbox model.
A sandbox is a regulatory construct that provides fintech players with a faster option to test innovative financial products and services in the market under regulatory scrutiny.
Rahul Banerjee, Founder and CEO of BondEvalue said,
“Getting the MAS’ greenlight is a big deal for us, our partners and our ecosystem. It will help to accelerate engagements with potential partners.
“Our experience affirms the success of the MAS’ sandbox in allowing fintechs like us to innovate, experiment with disruptive technology and trade on a limited scale without significant risks to our investors and ourselves.”
While it was still in the sandbox, BondbloX successfully carried out a blockchain-based bond trade in August 2020 as well as coupon payment in September.
BBX allows for bonds to be traded in smaller sizes of US$1,000 unlike typical bond trades of at least US$200,000. This leads to better access and better diversification opportunities for a market that is typically accessible to wealthy investors only.
The blockchain technology makes trading highly transparent and more cost-effective. Settlement on BBX is said to be on a T+0 basis, that is within seconds instead of the normal two-day settlement cycle, thereby reducing counterparty settlement risks for investors.
BondEvalue’s initial launch partner UOB Kay Hian, a brokerage that is a part of the UOB Group, and its first member, multi-family office Taurus Wealth Advisors, will ramp up to bring more investors to the platform.
BBX is also integrated with Northern Trust as the designated custodian and works closely with external counsel Linklaters to bring BondbloX alive.