Published by Jessica Weisman-Pitts
Posted on November 12, 2021
The two companies will collaborate on issuances by Japanese real estate companies and banks, that will be offered to investors in Japan
SINGAPORE, 11 NOVEMBER 2021 – Financial services company Tokai Tokyo Financial Holdings and private market exchange ADDX have announced a new partnership to offer fractional private market investment products to investors in Japan, after Tokai Tokyo secured a security tokens license from the Japanese regulator.
The Tokyo Stock Exchange-listed Tokai Tokyo is the holding company for a leading securities brokerage[1] in Japan. The company offers investment and trading services to investors via its network of 144 offices in Japan. It holds consolidated net assets worth US$1.4 billion and has US$38 billion of client assets under management.
Last month, Tokai Tokyo received a license from the Japanese regulator – the Financial Services Agency (FSA) – that allows the company to deal in security tokens, also known as digital securities. With the new license, Tokai Tokyo and ADDX plan to collaborate on security token issuances by Japanese real estate companies and banks. These future deals will be tokenised on the ADDX platform before being distributed by Tokai Tokyo to sophisticated investors in Japan. In addition, Japanese investors will be able to trade the digital securities on the ADDX secondary exchange through Tokai Tokyo.
With this new business partnership, ADDX expects a significant increase to its revenue from the Japanese market. Under the tie-up, Tokai Tokyo will be the first company in Japan to distribute security tokens that are tradeable on a secondary exchange. It will also be the first in Japan to deal in security tokens for non-liquid assets[2], as previous security token licensees received regulatory approvals for liquid assets[3].
For Tokai Tokyo and ADDX, this is a partnership that began in 2019 when Tokai Tokyo made its first investment in ADDX, previously known as iSTOX. Tokai Tokyo was also a lead investor in the US$50 million Series A fundraising round by ADDX in January 2021. Other ADDX shareholders include Japanese investors JIC Venture Growth Investments (JIC-VGI) and the Development Bank of Japan (DBJ), Singapore Exchange (SGX) as well as Temasek subsidiary Heliconia Capital[4].
Yuji Ban, Senior Managing Executive Officer, Tokai Tokyo Financial Holdings, said: “It took a long time to get to this point, but we now have a license for security tokens. Our future collaboration with ADDX will be key to establishing an innovative business model in Japan, where a digital security exchange like ADDX does not exist yet. We and many others in Japan eagerly anticipate working with ADDX to create investment opportunities for Japanese investors and new financing options for issuers. We look forward to working with ADDX on a variety of security token projects in the near future.”
Oi Yee Choo, Chief Commercial Officer of ADDX, said: “Japan has one of the most forward-thinking regulators on the issue of digital securities – alongside those in a handful of other jurisdictions, including Singapore. This prevailing view has once again been validated by the Japanese regulator’s latest move to grant a new security tokens license. As Japan embraces innovation in the capital markets, individuals will, no doubt, be the chief beneficiaries. The community of individual sophisticated investors in Japan is deep and sophisticated. Historically, they have shown a strong interest in real estate investments. But the opportunities open to them – whether in real estate or other asset types – are curtailed because of the high minimum investment sizes in the private markets. Digital securities can fractionalise investments, helping individuals to diversify their portfolios and to invest with a strategy and asset-mix closer to that of family offices or institutions. This promises several positive knock-on effects – from better retirement adequacy to a fairer distribution of wealth.”
She added: “Tokai Tokyo is one of the oldest and most trusted financial companies in Japan, with roots dating back to 1908. We expect this partnership to yield multiple deals over the next few quarters. The possibilities are exciting and limitless, given how the two companies share the same vision on innovation in the financial services and bring complementary strengths to the table.”
Digital securities are securities issued using blockchain and smart contract technology. They are more efficient to administer, because the technology reduces the need for intermediaries and automates manual processes. Digital securities are also regulated and backed by real-world assets. The efficiency of blockchain allows minimum ticket sizes for private market products to be reduced from US$1 million to US$10,000, expanding access for accredited investors to previously out-of-reach assets, including funds, bonds and pre-IPO equity. Issuers benefit from lower fees, the ability to reach a larger investor base, a lower fundraising threshold, as well as a faster speed-to-issuance.
ADDX is a full-service capital markets platform with Monetary Authority of Singapore (MAS) licenses for the issuance, custody, and secondary trading of digital securities. Individual accredited investors[5] using the ADDX platform today come from Asia Pacific, Europe, and the Americas (excluding the US).
For more information, please contact:
Tokai Tokyo Corporate Communications
Elgin Toh
About Tokai Tokyo Financial Holdings
Tokai Tokyo Financial Group aims to create a unique and comprehensive financial group by promoting digital strategies, the development and expansion of high-net-worth businesses, various business alliances with regional financial institutions, and the opening of securities companies specializing in smartphones and incorporating the networks of operating companies by providing platform functions. We aim to create a unique and comprehensive financial group that is distinct from the major securities companies, bank-affiliated securities companies, and online securities companies.
We are the only securities company to be selected as one of the “Digital Transformation (DX) Brand 2021” sponsored by the Ministry of Economy, Trade and Industry of Japan and the Tokyo Stock Exchange. One of our strengths in the digital arena is our Asian network of STOs, leveraging Singapore’s ADDX security token exchange, and at the same time, we have incorporated blockchain technology into our group. One of the targets of the “Tokai-Tokyo Digital World” that we aim to achieve is to contribute to regional development by providing digital functions, new means of financing, and digital currency platforms. In addition to the digital field, we also have a variety of service functions such as insurance, loans, and asset management. By providing these services not only to financial institutions but also to businesses, we hope to create a platform business model that is unique in Japan.
About ADDX
ADDX is a future-ready capital markets platform set to usher in a new era for fundraising and investment. Through digital securities, ADDX offers a more innovative, flexible, inclusive, and efficient system for an emerging generation of investors and issuers. ADDX is on a mission to enable all users to transact exactly the way they want to and extend capital market access to a broader segment of the community. ADDX is owned and operated by ICHX Tech Pte Ltd. ICHX Tech has been approved by MAS as a recognised market operator (RMO). It also has a capital markets services (CMS) license to deal in securities and collective investment schemes as well as to provide custodial services. For more information, visit ADDX.co.
Disclaimer: ICHX Tech Pte. Ltd. (“ADDX”) is not a licensed securities company under the Japanese Financial Instruments and Exchange Act and accordingly ADDX is prohibited from making solicitations to investors in Japan.
[1] Tokai Tokyo Securities Co., Ltd.
[2] Examples of non-liquid assets include collective investment schemes and trust certificates.
[3] Examples of liquid assets include listed securities and listed bonds.
[4] Also among ADDX shareholders are Korea’s Hanwha Asset Management and Thailand’s Kiatnakin Phatra Financial Group.
[5] The Singapore regulatory regime that ADDX operates under defines an accredited individual investor as an individual whose net personal assets exceed in value SGD 2 million (or its equivalent in another currency), or whose financial assets (net of any related liabilities) exceed in value SGD 1 million (or its equivalent in another currency), or whose income in the preceding 12 months is at least SGD 300,000 (or its equivalent in another currency).
The two companies will collaborate on issuances by Japanese real estate companies and banks, that will be offered to investors in Japan
SINGAPORE, 11 NOVEMBER 2021 – Financial services company Tokai Tokyo Financial Holdings and private market exchange ADDX have announced a new partnership to offer fractional private market investment products to investors in Japan, after Tokai Tokyo secured a security tokens license from the Japanese regulator.
The Tokyo Stock Exchange-listed Tokai Tokyo is the holding company for a leading securities brokerage[1] in Japan. The company offers investment and trading services to investors via its network of 144 offices in Japan. It holds consolidated net assets worth US$1.4 billion and has US$38 billion of client assets under management.
Last month, Tokai Tokyo received a license from the Japanese regulator – the Financial Services Agency (FSA) – that allows the company to deal in security tokens, also known as digital securities. With the new license, Tokai Tokyo and ADDX plan to collaborate on security token issuances by Japanese real estate companies and banks. These future deals will be tokenised on the ADDX platform before being distributed by Tokai Tokyo to sophisticated investors in Japan. In addition, Japanese investors will be able to trade the digital securities on the ADDX secondary exchange through Tokai Tokyo.
With this new business partnership, ADDX expects a significant increase to its revenue from the Japanese market. Under the tie-up, Tokai Tokyo will be the first company in Japan to distribute security tokens that are tradeable on a secondary exchange. It will also be the first in Japan to deal in security tokens for non-liquid assets[2], as previous security token licensees received regulatory approvals for liquid assets[3].
For Tokai Tokyo and ADDX, this is a partnership that began in 2019 when Tokai Tokyo made its first investment in ADDX, previously known as iSTOX. Tokai Tokyo was also a lead investor in the US$50 million Series A fundraising round by ADDX in January 2021. Other ADDX shareholders include Japanese investors JIC Venture Growth Investments (JIC-VGI) and the Development Bank of Japan (DBJ), Singapore Exchange (SGX) as well as Temasek subsidiary Heliconia Capital[4].
Yuji Ban, Senior Managing Executive Officer, Tokai Tokyo Financial Holdings, said: “It took a long time to get to this point, but we now have a license for security tokens. Our future collaboration with ADDX will be key to establishing an innovative business model in Japan, where a digital security exchange like ADDX does not exist yet. We and many others in Japan eagerly anticipate working with ADDX to create investment opportunities for Japanese investors and new financing options for issuers. We look forward to working with ADDX on a variety of security token projects in the near future.”
Oi Yee Choo, Chief Commercial Officer of ADDX, said: “Japan has one of the most forward-thinking regulators on the issue of digital securities – alongside those in a handful of other jurisdictions, including Singapore. This prevailing view has once again been validated by the Japanese regulator’s latest move to grant a new security tokens license. As Japan embraces innovation in the capital markets, individuals will, no doubt, be the chief beneficiaries. The community of individual sophisticated investors in Japan is deep and sophisticated. Historically, they have shown a strong interest in real estate investments. But the opportunities open to them – whether in real estate or other asset types – are curtailed because of the high minimum investment sizes in the private markets. Digital securities can fractionalise investments, helping individuals to diversify their portfolios and to invest with a strategy and asset-mix closer to that of family offices or institutions. This promises several positive knock-on effects – from better retirement adequacy to a fairer distribution of wealth.”
She added: “Tokai Tokyo is one of the oldest and most trusted financial companies in Japan, with roots dating back to 1908. We expect this partnership to yield multiple deals over the next few quarters. The possibilities are exciting and limitless, given how the two companies share the same vision on innovation in the financial services and bring complementary strengths to the table.”
Digital securities are securities issued using blockchain and smart contract technology. They are more efficient to administer, because the technology reduces the need for intermediaries and automates manual processes. Digital securities are also regulated and backed by real-world assets. The efficiency of blockchain allows minimum ticket sizes for private market products to be reduced from US$1 million to US$10,000, expanding access for accredited investors to previously out-of-reach assets, including funds, bonds and pre-IPO equity. Issuers benefit from lower fees, the ability to reach a larger investor base, a lower fundraising threshold, as well as a faster speed-to-issuance.
ADDX is a full-service capital markets platform with Monetary Authority of Singapore (MAS) licenses for the issuance, custody, and secondary trading of digital securities. Individual accredited investors[5] using the ADDX platform today come from Asia Pacific, Europe, and the Americas (excluding the US).
For more information, please contact:
Tokai Tokyo Corporate Communications
Elgin Toh
About Tokai Tokyo Financial Holdings
Tokai Tokyo Financial Group aims to create a unique and comprehensive financial group by promoting digital strategies, the development and expansion of high-net-worth businesses, various business alliances with regional financial institutions, and the opening of securities companies specializing in smartphones and incorporating the networks of operating companies by providing platform functions. We aim to create a unique and comprehensive financial group that is distinct from the major securities companies, bank-affiliated securities companies, and online securities companies.
We are the only securities company to be selected as one of the “Digital Transformation (DX) Brand 2021” sponsored by the Ministry of Economy, Trade and Industry of Japan and the Tokyo Stock Exchange. One of our strengths in the digital arena is our Asian network of STOs, leveraging Singapore’s ADDX security token exchange, and at the same time, we have incorporated blockchain technology into our group. One of the targets of the “Tokai-Tokyo Digital World” that we aim to achieve is to contribute to regional development by providing digital functions, new means of financing, and digital currency platforms. In addition to the digital field, we also have a variety of service functions such as insurance, loans, and asset management. By providing these services not only to financial institutions but also to businesses, we hope to create a platform business model that is unique in Japan.
About ADDX
ADDX is a future-ready capital markets platform set to usher in a new era for fundraising and investment. Through digital securities, ADDX offers a more innovative, flexible, inclusive, and efficient system for an emerging generation of investors and issuers. ADDX is on a mission to enable all users to transact exactly the way they want to and extend capital market access to a broader segment of the community. ADDX is owned and operated by ICHX Tech Pte Ltd. ICHX Tech has been approved by MAS as a recognised market operator (RMO). It also has a capital markets services (CMS) license to deal in securities and collective investment schemes as well as to provide custodial services. For more information, visit ADDX.co.
Disclaimer: ICHX Tech Pte. Ltd. (“ADDX”) is not a licensed securities company under the Japanese Financial Instruments and Exchange Act and accordingly ADDX is prohibited from making solicitations to investors in Japan.
[1] Tokai Tokyo Securities Co., Ltd.
[2] Examples of non-liquid assets include collective investment schemes and trust certificates.
[3] Examples of liquid assets include listed securities and listed bonds.
[4] Also among ADDX shareholders are Korea’s Hanwha Asset Management and Thailand’s Kiatnakin Phatra Financial Group.
[5] The Singapore regulatory regime that ADDX operates under defines an accredited individual investor as an individual whose net personal assets exceed in value SGD 2 million (or its equivalent in another currency), or whose financial assets (net of any related liabilities) exceed in value SGD 1 million (or its equivalent in another currency), or whose income in the preceding 12 months is at least SGD 300,000 (or its equivalent in another currency).
Explore more articles in the Top Stories category
