SGX taps blockchain-enabled bond issuance platform to cut settlement time to 2 days

THE Singapore Exchange (SGX) announced Wednesday (Jun 1) that the central depository (CDP) has made available to market participants a blockchain-enabled bond issuance platform by Marketnode.

Through the digitalisation of manual processes in bond issuance and the full elimination of a paper trail, the platform enables debt issuers to shorten the settlement time for new-issue bond offerings to 2 days, instead of 5.

The shorter settlement time is in line with the typical settlement period for the secondary bond market.

OCBC’s US$100 million Euro Commercial Paper issuance is the first transaction on the “direct-to-depository” platform, which connects debt issuers into SGX CDP.

OCBC joined Marketnode – a digital asset venture between SGX Group and Temasek – as a partner bank last December, 2021 and worked with SGX CDP and Marketnode on the maiden issuance. OCBC also acted as the sole dealer for the issuance on the platform.

Kenneth Lai, OCBC’s head of global treasury, said: “This latest automation and digitalisation across the entire bond lifecycle from issuance, clearing and settlement to asset servicing is a culmination of efforts and alignment of strategic direction from all involved parties to modernise existing processes.”

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Lee Beng Hong, SGX’s head of fixed income, currencies and commodities, said: “The digitalisation of OCBC Bank’s bond issuance can act as a blueprint for us to operate Asia’s first digital bond infrastructure utility within a regulated securities depository, further strengthening Singapore’s position as a fixed-income hub with one-stop digital issuance for international issuers.”