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DBS launches Asia’s First Automated Digital Bond Issuance Platform

DBS Bank

DBS Fixed Income Execution (FIX) Marketplace DBS Fixed Income Execution (FIX) Marketplace paves the way for the digital transformation of capital markets

USD1 billion Euro-Commercial Paper Programme by Keppel Corporation is the first to be digitalised for issuances under DBS’ FIX Marketplace

To propel efforts to create a more efficient and accessible capital market through digitalisation, DBS has launched FIX Marketplace. This marks Asia’s first fully digital and automated fixed income execution platform, where issuers can directly connect with investors on the platform at their sole discretion. Keppel Corporation Limited (Keppel Corporation) is the first corporate issuer to have its USD1.0 billion Euro-Commercial Paper Programme digitalised for issuances under the FIX Marketplace, and has appointed DBS as the sole arranger and dealer of the Programme.

The objective of the FIX Marketplace is to make capital markets access more time and cost efficient, and to develop the breadth and depth of Asian bond markets at a faster pace, thereby creating more inclusive and accessible markets for issuers.

The first version of FIX Marketplace achieves the following:

1. Provides issuers an interface to directly issue their own bonds into the marketplace, whilst maintaining the ability to execute bond transactions via dealers;

2. Revolutionises the primary bond issuance process by allowing deals to be launched with one click, what we call the ‘Quick Launch’ method;

3. Enables direct order taking and transparent allocation for investors on primary market1 bond issuances;

4. Fully digitalises and automates documentation and primary trade confirmation generation on the platform;

5. Empowers issuers and investors with the relevant tools and information to make more informed funding and investment decisions;

6. Supports issuers in generating ‘Digital Bond’ ready transactions which can be listed and traded on the DBS Digital Exchange.

Clifford Lee, Global Head of Fixed Income, DBS, said: “The time is ripe for traditional ways of bond origination to make way for a more digital approach, to do what has been aspired for so long – by taking the first step towards the creation of an independent platform that allows bond issuers efficient and effective direct access to the market place and bond investors. The FIX Marketplace marks the first step in this ambitious journey to democratise the capital markets for better transparency and broader financial inclusion. This can only be done effectively in consultation and collaboration with market players and participants, including arrangers, issuers, investors, lawyers, auditors and clearing houses. Through this collective effort, we can enhance the capabilities and features of the FIX Marketplace to best transform the market for the better. We are grateful and proud to start this journey with Keppel Corporation as the first issuer onboarded on the platform, Phillip Securities on the investor front, along with Linklaters and other prominent Singapore firms in the provision of legal documentation insights.”

A collaborative effort

The development of this platform had the benefit of many months of close consultation and collaboration with various market participants who share the same vision. Over USD300 million of dealer-led bank certificates of deposit issuances have transacted on the platform with direct investor subscriptions.

Keppel Corporation is the first corporate to establish a USD1.0 billion digital Euro-Commercial Paper Programme on the FIX Marketplace, and with investors like Phillip Securities starting to get onboarded onto the platform, a seamless end-to-end automated process can be facilitated – connecting the issuer to the investor directly without the involvement of a bank – for the first time in Asia.

All proposed Notes issued on the platform can be directly subscribed for by investors.

Lynn Koh, Director of Group Treasury, Keppel Corporation, said: “The establishment of our digital USD1.0 billion Euro-Commercial Paper Programme marks yet another significant milestone in Keppel’s digitalisation roadmap. We look forward to collaborating with DBS on issuances under the Euro-Commercial Paper Programme on the FIX Marketplace, which enables companies like Keppel to respond swiftly to market opportunities with self-executable offerings.”

Richmond Zhan, Head of Fixed Income, Phillip Securities, said: “We are pleased to be onboarded, giving us an opportunity to participate in commercial papers via DBS FIX Marketplace once the deals are launched. We appreciate the seamless and automated subscription process and we look forward to DBS FIX Marketplace bringing greater efficiency and transparency to capital markets. Our clients can access the commercial paper market in addition to global wholesale bonds directly on our online trading platform, POEMS. Furthermore, with the ease of access to commercial papers through the DBS FIX Marketplace, investors can secure higher returns over short term deposits.”

An established team of legal counsels also played an important role in the development of FIX Marketplace. The parties involved include leading international legal firm, Linklaters, which advised on the processes required to digitalise the necessary documents to enable an end-to-end digital drawdown process, and local counsels WongPartnership, Allen & Gledhill and Rajah & Tann which participated in the development by working with potential issuer clients.

Jon Horan, Partner at Linklaters, said: “It has been excellent to partner with DBS and the other project members for this important and innovative development in Asia’s capital markets. Moving the legal processes of bond issues on to digital platforms is inevitable and it is fantastic to see DBS and Singapore leading the way.”

Next phase

FIX Marketplace is an important building block for DBS in the journey to help digitalise the capital markets in Asia. For the next phase of development, issuers will be able to issue self-led digital bonds which can be listed on the DBS Digital Exchange (DDEx) to provide corporates an alternate investor base to tap capital markets for their business and growth ambitions.

Launched in December 2020, DDEx is part of an integrated digital asset ecosystem which leverages on blockchain technology to provide clients with a secure and transparent platform to raise funds from the private market. As part of efforts to broaden the suite of products on the DDEx, DBS announced in May that it had priced an SGD 15 million digital bond, marking DDEx’s first Security Token Offering (STO) on the platform.

For more information, please visit: https://www.dbs.com.sg/corporate/solutions/digital/fixmarket

[1] The primary market refers to the new issuance market in which transactions occur directly between the bond issuer and bond buyer.

About DBS
DBS is a leading financial services group in Asia with a presence in 18 markets. Headquartered and listed in Singapore, DBS is in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank’s “AA-” and “Aa1” credit ratings are among the highest in the world.

Source: DBS

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