Singapore fintech BondEvalue has launched the BondbloX Bond Exchange, which went live with its first trade on Wednesday.
With BondbloX Bond Exchange (BBX), BondEvalue hopes to open up institutional bond markets to more investor types by enabling faster, more transparent and lower-cost transactions, founder and CEO Rahul Banerjee told finews.asia.
«We are fundamentally changing the way bond markets work by setting up an exchange-driven trading venue,» Banerjee said. «We are moving away from the over-the-counter nature of the industry, hence, reducing excess spreads and empowering investors by delivering bonds at better prices and greater transparency.»
«With this shared truth and asset provenance, we can then allow investors to trade bonds in smaller denominations and have instant settlement of trades,» he said about the platform's use of blockchain technology.
Instant Settlement
The platform operates on a B2B2C model and connects to the end investor via their bank or broker. Settlement on BBX occurs on a T+0 basis, and the platform charges a flat fee of $2 per trade, irrespective of size and a platform fee of 20 basis points annually, while its partners can opt to charge a commission for each transaction.
For its launch, BBX has partnered with brokerage UOB Kay Hian, Northern Trust as designated custodian, and multi-family office Taurus Wealth Advisors, as one of the first members of the exchange.
More partners are in the pipeline and will be onboarded in the coming months, BBX said in a statement on Wednesday.
Game-Changer
While BBX is currently only open only to accredited and institutional investors, the firm said it hopes to have over 25 million people in Asia invest in bonds in the next five years, from 500,000 individuals currently.
To achieve this, Banerjee said BondEvalue is targeting the so-called «HENRYS» (high-earners not rich yet), and will, for a start, list the 100 most liquid bonds out of the approximately 8 million bonds issued globally.
«Fractional ownership allows for bonds to be traded in smaller denominations of $1,000, lowering the barrier to entry and paving the way for many more investors,» Banerjee said.
Deep Experience
BondEvalue was founded in 2016, and was the first company in the bond industry to be approved under the MAS regulatory sandbox.
Banerjee previously worked at Citibank, Credit Suisse, Nomura Securities and Standard Chartered Bank, and co-founder Rajaram Kannan was senior vice president, Treasury and Markets Technology, DBS Bank.
The firm, which also operates an office in India, recently expanded to Mexico, appointing former HSBC Mexico head trader Jaime Zenizo to lead its business there.
