Singapore’s OCBC Bank has partnered with locally-headquartered global private market digital exchange ADDX to distribute its first tokenized equity-linked structured note to accredited investors.
The fixed coupon note, launched in early May, is the first product issued by a Singapore bank to land on ADDX’s shelf, and it marks the start of a long-term partnership between ADDX and OCBC Bank that will see both parties work together to put out a wider variety of investment products.
The note is linked to shares in a US-listed tech giant and was launched on the ADDX platform at a minimum size of US$50,000.
Fixed coupon notes are equity-linked structured notes that pay regular distributions at pre-defined intervals, provided that no extraordinary event or trigger event has occurred according to the terms of the notes.
The notes present a way for investors with a specific view on the price movement of an underlying security or a basket of securities to generate additional cashflow while gaining potential exposure on the underlying securities.
Partnering with digital players like ADDX and deepening banking relationships with high-growth and emerging sectors, OCBC points out, allow it to increase its customer proposition and tap on a larger investor base. Tokenizing the fixed coupon note will in turn allow more accredited investors to access the product.
Kenneth Lai, the bank’s head of global treasury, says: “While we already have a comprehensive stable of treasury products that includes sustainability-linked interest rate swaps, cross currency swaps, structured deposits and green bonds, it is important that we continue to innovate and find new channels for our products.”