Cathay Securities has collaborated with local green energy startup and renewable energy retailer Sunshine Future to issue Taiwan’s first “Sunshine Green Benefit Debt-based Security Token Offering (STO)”. The fundraising was completed on December 8th and secondary market trading began on the 12th.
Background:
Understanding the three major trading platforms, restrictions, and regulations of the Taiwan Carbon Exchange. Is there a future for carbon STOs?
Supplemental background:
Taiwan’s STO issuance is being overtaken! OSL’s “Fund Token” plan is under review by the Hong Kong Exchange.
Table of Contents:
What is the Sunshine Green Benefit Debt-based STO?
Who can buy it?
Targeting ESG small and medium-sized enterprises to promote green finance
Introduction to Taiwan’s STO development
Cathay Securities announced in early November that it has officially obtained approval from the Financial Supervisory Commission to operate STO business, becoming the first approved securities firm in Taiwan. It has also partnered with local green energy startup and renewable energy company Sunshine Future to issue Taiwan’s first STO, “Sunshine Green Benefit Debt-based STO”, with an expected fundraising of 30 million NTD.
Cathay Securities stated earlier this week that the STO has officially completed fundraising on the 8th and started secondary market trading on the 12th.
What is the Sunshine Green Benefit Debt-based STO?
According to the official explanation, the “Sunshine Green Benefit Debt-based STO” is a six-year debt-based STO with an annual interest rate of 3.5%. It adopts an annual interest payment and maturity repayment mechanism, with an expected fundraising of 30 million NTD. Investors can subscribe and trade on the STO trading platform established by Cathay Securities.
Sunshine Future stated that the 30 million NTD funds raised by the “Sunshine Green Benefit Debt-based STO” will be used to build 20 solar power plants, expecting to generate 10 million green power units in the future, achieving a carbon reduction of approximately 5 million tons.
At the same time, subscribers of this STO enjoy “green power priority purchase rights” and can purchase green power from Sunshine Future under relatively favorable conditions in the market to meet corporate ESG needs.
The Financial Supervisory Commission stipulates that currently only professional investors (with a net worth of over 30 million NTD) can invest in STOs. Subscription and trading of virtual currencies are conducted under real-name registration. Investors interested in participating in subscriptions should first apply for registration on the trading platform, sign account opening agreements and risk disclosure statements with securities firms, and designate their own bank accounts as transaction accounts.
Note: The current fundraising limit for each STO is below 30 million NTD, and individuals can only invest a maximum of 300,000 NTD, while there is no limit for corporations.
Cathay Securities recently stated that the majority of investors participating in this STO are individuals with diverse backgrounds who are willing to try new forms of financial products and have a strong interest in blockchain.
Source: Cathay Securities
According to Yahoo News, Cathay Securities Chairman Chuang Shun-yu stated in November that in addition to providing new fundraising channels for enterprises and reaching more potential investors, Cathay Securities can also provide diversified and innovative investment options for professional investors. This represents Cathay Securities’ sufficient professional and technical capabilities in developing innovative products, and it is expected to drive the vigorous development of innovative businesses.
The Financial Supervisory Commission of Taiwan established the STO fundraising mechanism in 2020, allowing enterprises to issue cryptocurrencies to raise funds. However, after more than two years, there have been no applications for this mechanism. Therefore, on January 20, 2022, the Financial Supervisory Commission announced three major relaxations:
– Allowing foreign investment in STOs
– Shortening the interval between accepting two STOs for securities firms
– Raising the upper limit of a single fundraising platform
Currently, only “profit-sharing” and “bond-type” virtual tokens without shareholder rights can be issued. Through the platform market mechanism, the prices fluctuate, and investors can earn interest and sell to make a price difference. However, it should be noted that if the project fails, there is a risk of the virtual currency price dropping to zero.
Related reports:
What was said at a Taiwan STO conference debate?
Taiwan’s STO issuance is being overtaken! OSL’s “Fund Token” plan is under review by the Hong Kong Exchange.
Interpreting the new progress of STOs: Taiwan’s GreTai Securities Market releases “Virtual Currency Business Management Rules”, which are as strict as the Securities and Exchange Act.
Tags:
STO
Cathay Securities
Securities Token Offering
Financial Supervisory Commission
Sunshine Green Benefit Debt-based STO