Digital investment platform offers commercial papers to retail investors
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Singapore's Digital Asset Exchange chief executive Rachel Chia says the platform is "a commitment to breaking barriers in finance and to make investing truly democratised".
PHOTO: SDAX
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SINGAPORE – A private markets investment and trading platform is offering retail investors the chance to buy an investment usually reserved for more sophisticated traders.
Singapore’s Digital Asset Exchange (SDAX), as the platform is known, is launching a short-term financing tool designed to help a firm cover working capital and other immediate needs.
Such tools – called commercial paper in financial circles – are usually offered only to institutional and accredited investors.
But SDAX aims to raise up to $1 million by selling the product to retail investors. The funds will then be used by Intraco, the Singapore Exchange-listed trading company that is issuing the commercial paper.
The product is for three months and will pay an interest rate of 3.85 per cent a year. The offer closes on Nov 28.
Retail investors who create an account on SDAX can buy a slice of the commercial paper in the form of tokens, with each one requiring a minimum investment of $1,000.
Investors have to buy only one token to take part in the product, making this an easily accessible option for retail investors, SDAX said.
“As the country’s first licenced tokenised digital investment platform to offer commercial papers to retail investors, this launch signals a transformative shift in Singapore’s alternative investment landscape,” it added.
SDAX chief executive Rachel Chia noted: “This isn’t just a launch; it’s a commitment to breaking barriers in finance and to make investing truly democratised by taking a product that was previously available only to institutional and accredited investors, and making it available to all retail investors.”
SDAX has raised over $650 million in commercial papers from accredited investors, securing one of the largest market shares in Singapore.
Ms Chia said this move comes as retail investors become more sophisticated, with many wanting to diversify their portfolios beyond the traditional investments of bonds, equities and real estate.
“We have seen growing demand from retail investors,” she added.
“The younger investors, in particular, are leading the charge and driving the shift in the market seeking access to private market and alternative investment opportunities.”
Ms Chia added that retail investors also have greater exposure to global investment opportunities, with digital platforms making information more available.
“Retail investors are increasingly aware of these private markets and alternative investment options that could offer them higher yield potential or diversification benefits amidst inflationary pressure, volatile markets and economic uncertainties,” she said.
But she warned that investors should also consider their risk appetites and have a clear understanding of their financial goals and the features of the product they buy.
“Commercial papers, for example, are short-term instruments that typically offer higher yields compared with traditional savings products. However, they are not capital-guaranteed, so it’s essential for investors to carefully assess the creditworthiness of the company issuing the paper.”
SDAX has a pipeline of products tailored to retail investors that it will roll out over the next 12 months.
“As the retail segment matures, we believe these offerings will play a key role in redefining investment strategies for a wider audience,” Ms Chia said.
