OSL Digital Securities Limited (OSL) announced it that it became the first Type 1 SFC-licensed digital asset broker to distribute security tokens to professional investors in Hong Kong in a private security token offering (STO).
Participants in the offering include Animoca Brands, Head & Shoulders Financial Group, China Fortune Financial Group, Volmart and Monmonkey Group Asset Management.
Each token represents a US$10,000 unit of a bitcoin-linked, coupon-rate USD bond.
The bond was issued by a subsidiary of OSL parent company, BC Technology Group (BC Group), and BC Group also acted as the bond guarantor.
The tokens were developed using the Ethereum blockchain, have a three-month tenor and carry a fixed and a bonus coupon linked to bitcoin performance.
OSL provided the end-to-end services for the STO transaction, acting as the bookrunner, placing agent, fiscal and paying agent, transfer agent, registrar, calculation agent, tokenization technology partner and trading venue.
OSL Digital Securities holds a license for Type 1 (dealing in securities) and Type 7 (automated trading service) regulated activities related to digital assets from the Hong Kong Securities and Futures Commission (SFC), which allows it to issue and distribute digital securities through security token offerings to professional investors.
The Hong Kong Monetary Authority (HKMA) and the SFC issued a joint circular on 28 January 2022, allowing registered institutions and licensed corporations to provide digital asset investment services by partnering only with SFC-licensed virtual asset trading platforms.
Yat Siu, Co-Founder and Executive Chairman of Animoca Brands said,
”The digital asset industry, particularly Web3 and tokenized securities, is revolutionising and modernising traditional financial services. Like NFTs and other digital assets, STOs have the potential to create new markets and distribution channels and provide enhanced digital property rights for market participants.
We’re thrilled to participate in this placement with OSL, which is an innovative global leader in the space and the first licensed Type 1 digital asset broker in Hong Kong.”
Wayne Trench, CEO of OSL said,
“The OSL STO transaction is a viable model for security token issuance and distribution of digital tokens by regulated operators. We designed the issuance to demonstrate the immense value and ease-of-distribution for a security token issued on a public blockchain.
The token architecture uses smart contract technologies to permit transparent transfers of security tokens on the public blockchain between hosted and private wallets and is fully compliant with securities laws and AML requirements.
