The Singapore Exchange (SGX) and Temasek subsidiary Heliconia Capital Management have invested in a capital market platform called iSTOX.
The platform designed by blockchain-based infrastructure company ICHX Tech aims to provide fast time-to-issuance and a high level of transparency for users.
While iSTOX incorporates blockchain and smart contract technology, it is not a cryptocurrency exchange as all issuances will be bought and sold using fiat currency.
Mr Chew Sutat, SGX's executive vice-president and head of equities and fixed income, and Mr Chua Kim Leng, former special adviser (financial supervision) and assistant managing director at the Monetary Authority of Singapore (MAS), have also joined the start-up's board.
ICHX Tech is working towards being licensed by the MAS as a recognised market operator.
The iSTOX platform will go live once MAS licences have been obtained, the parties said yesterday.
"iSTOX will be well-positioned at the forefront of a new era for capital fund-raising through the use of security token offerings," they added.
These are financial securities that offer flexible issuance structures and can be backed by a variety of underlying assets, which include company shares or debt.
ICHX Tech chief executive Danny Toe said: "iSTOX presents a more flexible, inclusive and efficient platform that we believe will greatly benefit both companies looking to raise capital and investors seeking bespoke investment opportunities.
"In this way, we aim to offer a future-ready platform for capital fund-raising which offers substantial benefits to complement existing capital market mechanisms."
SGX's Mr Chew said: "As capital markets evolve, companies will seek new funding avenues that suit their different stages of growth and business needs.
"To advance Singapore's position as a world-class financial hub, we need innovative solutions that push boundaries and set new benchmarks. We believe this new platform by iSTOX will add to the vibrancy of Singapore's capital market ecosystem."
Heliconia Capital Management chief executive Derek Lau noted: "We see iSTOX as a potential disruptor in the traditional capital markets.
"More interestingly, we now have the chance to provide small and medium-sized enterprises the alternative to capital raising and market liquidity by moving beyond traditional securities exchanges."