In a pioneering move, Taiwan’s Financial Supervisory Commission (FSC) has granted the country’s inaugural security token offering (STO) license to a leading firm, Cathay Securities. This milestone allows Cathay to roll out its “Sunshine Green Yield” STO bonds, designed to support environmental endeavors through strategic green energy investments by businesses.
These novel STO bonds, bearing a 3.5% starting interest rate over a six-year term with a principal sum of NT$30 million, mark a new chapter in Taiwan’s financial landscape. Enterprises and accredited investors are given a unique opportunity to contribute to green initiatives while earning up to 5.8% in interest annually. Cathay plans to launch these bonds on its own STO exchange platform on December 12.
The FSC’s regulatory environment, shaped since 2019, sets clear boundaries for tokenized asset dealings, limiting fundraising to NT$30 million and capping the number of STOs to two per year for each issuer. These regulatory measures ensure a focused and secure investment climate, available solely to businesses and select investors.
In an effort to establish a robust pricing model for STOs, Cathay has collaborated with Numerix, a risk-control tech enterprise, and academic authorities to introduce Taiwan’s first STO valuation framework. This model boasts a remarkable 95% precision rate in forecasting default risks for small and medium enterprises.
Cathay Securities, a giant in Taiwan’s financial sector since 2004, commands a significant presence, catering to a vast clientele of investors and brokerage customers. This development not only reinforces Cathay’s market dominance but also underscores Taiwan’s progressive stance on integrating technology with finance.
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