While Asia’s fixed income markets continue to see rapid growth, bond issuance and servicing processes remain inefficient due to the absence of a single platform for the exchange of information between multiple parties and tracking of a bond throughout its lifecycle.
The trial will make use of tokenised securities and smart contracts over a permissioned ledger to streamline these workflows and reduce process friction, lowering costs for issuers, investors, bond arrangers and custodians.
Tony Cripps, Chief Executive Officer at HSBC Singapore, said: “The potential of DLT is an evolving story, and its role in overcoming inefficiencies in the fixed income market is yet to be seen. Only by collaborating with market participants will we fully understand its actual viability; by partnering with SGX and Temasek, we hope to explore whether digital assets could become a reality.”
Lee Beng Hong, Head of Fixed Income, Currencies & Commodities at SGX, said: “As Asia’s largest listing venue for bond issuers globally, we are excited to collaborate on a new operating model that could potentially bring cost savings to issuers, arrangers and investors. Having HSBC and Temasek on board will enable us to evaluate holistically whether smart contracts and DLT can solve some of the long-standing challenges in the fixed income issuance ecosystem.”
Chia Song Hwee, President & Chief Operating Officer at Temasek, said: “Blockchain technology has great potential in transforming businesses and opening up new opportunities. We are pleased to partner with HSBC and SGX on this test-bed, with an eye on how the technology can potentially be applied more broadly across a range of products. Such partnerships and initiatives allow us to advance the impact of emerging technologies and better understand how economies can benefit.”
Notes to Editors
Singapore Exchange is Asia’s leading and trusted market infrastructure, operating equity, fixed income and derivatives markets to the highest regulatory standards. As Asia’s most international, multi-asset exchange, SGX provides listing, trading, clearing, settlement, depository and data services, with about 40% of listed companies and over 80% of listed bonds originating outside of Singapore.
SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN and offers commodities and currency derivatives products. Headquartered in AAA-rated Singapore, SGX is globally recognised for its risk management and clearing capabilities. For more information, please visit www.sgx.com.
Temasek is an investment company with a net portfolio value of S$313 billion (US$231b, €206b, RMB1.55t) as at 31 March 2019.
Our Temasek Charter roles as an investor, institution and steward shape our investment stance, ethos and philosophy, to do well, do right and do good.
Six structural trends help shape our investment direction in Temasek: longer lifespans, rising affluence and sustainable living drive social progress, enabled by technological solutions for sharing economies, smarter systems and a more connected world.
We actively seek sustainable solutions to address present and future challenges, as we capture investment and other opportunities that help to bring about a better, smarter and more sustainable world.
Headquartered in Singapore, we have 11 offices around the world: Beijing, Hanoi, Mumbai, Shanghai and Singapore in Asia; and London, New York, San Francisco, Washington DC, Mexico City, and Sao Paulo outside Asia.
For more information on Temasek, please visit www.temasek.com.sg.