Backed by SGX and licensed by MAS, 1exchange takes private companies’ shares and puts them into an SPV to back digital tokens that can then be listed and traded by investors.
Singapore has launched its first and only regulated private securities exchange, known as 1X (1exchange).
1X was set up by CapBridge, which is backed by SGX (Singapore Exchange) and holds a capital markets services. CapBridge was granted a RMO (Recognised Market Operator) licence by the MAS (Monetary Authority of Singapore) in November, under which 1X operates.
Following a six-week campaign and hundreds of bids from investors, a Singapore-based boutique fund management company, Aggregate Asset Management (AAM), has listed 5 percent of its share equity on 1X. This amounts to over SGD 5.6 million (USD 4.1 million) worth of tradeable private equities, represented by digital tokens.
The listing was marked by a gong-striking ceremony on Wednesday (10 July), held in conjunction with SGX’s market opening, with representatives from 1X, AAM, CapBridge, trust administrator Equiom Singapore, blockchain partner ConsenSys, and strategic partner and shareholder SGX all present.
“We recognise that companies in an earlier growth stage may need access to capital before they are ready for a public listing,” said SGX SVP and head of equity capital markets Mohamed Nasser Ismail. “We supported 1exchange to create a virtuous ecosystem of capital flow catering to companies in the mid-late stages of growth, adding to the vibrancy of the capital markets in Singapore.”
Private companies can list up to 30 percent of their shares in the form of tradeable private equities on 1X, establishing a new and regulated asset class for Singapore accredited investors, i.e. individuals with a minimum annual income of SGD 300,000 and a net worth of SGD 2 million.
The platform also allows overseas retail investors to participate provided they meet local KYC (know your customer) requirements.
1X is built on the public Ethereum mainnet, potentially enabling the private exchange to tap into a global liquidity pool.
“We take a portion of private companies – usually 10 to 30 percent – and put that into a special purpose vehicle (SPV) … to back every token we mint for listing and trading,” 1X chief executive Haiping Choo told Coindesk.
“The overall idea is to bring liquidity to an otherwise historically illiquid assets. We are starting off with private companies. In the future, we intend to apply the same workflow to other illiquid assets like bonds or real estate, etc.”