The case for VCC security tokens

Absence of administrative protocols makes VCC funds particularly conducive for tokenisation, say InvestaX and partners in proof-of-concept study

Kelly Ng

Published Fri, Oct 15, 2021 · 05:50 AM

Blockchain

Singapore

SINGAPORE'S Variable Capital Company (VCC) vehicles have allowed more flexibility for investors, with family offices and alternative asset managers setting up VCCs to take advantage of a streamlined structure that can make it more efficient to set up shop here.

But the structure, formally introduced in January 2020, is by nature missing prescribed administrative protocols, which makes it hard for units of such funds to be traded.

Enter Singapore-based digital securities platform InvestaX. Global financial institutions UBS and State Street, among others, have partnered with InvestaX to see if it can find a beneficial way for VCCs to issue their shares in security tokens.

Hailed as a game-changer for Singapore's fund management industry, the VCC is a flexible corporate entity targeted at a wide range of investment funds. As at December last year, more than 160 VCCs have been incorporate…