Regulatory Approval for "Sunshine Green Yield" Bonds
Taiwan's Financial Supervisory Commission (FSC) has awarded Cathay Securities the country's first security token offering (STO) license. The STO, called "Sunshine Green Yield," features bonds with a maturity of six years, an initial interest rate of 3.5%, and a principal amount of NT$30 million ($0.93 million).
Benefits of the STO
Through the STO, enterprise owners can purchase green electricity on the market for environmental and corporate governance initiatives. They will receive variable interest rate payments of up to 5.8% per year. Trading for the Sunshine Green Yield bonds will begin on December 12 on Cathay's in-house STO exchange platform.
Regulations and Limitations
Since 2019, the FSC has classified tokenized assets as securities and allowed financial institutions to apply for licensing. However, issuers must comply with a fundraising limit of $930,000 and can only conduct a maximum of two STOs per year. The offerings are available to enterprises and accredited investors, with the latter being limited to purchasing a maximum of $9,300 worth of STOs.
Development of STO Evaluation Model
Cathay Securities partnered with risk-control technology company Numerix and professor Ye Zongying at National Chung Hsing University to develop Taiwan's first STO evaluation model. The model claims to be "95% accurate" in calculating the default probability of small and medium-sized businesses.
About Cathay Securities
Founded in 2004, Cathay Securities is one of the largest financial services firms in Taiwan. The company serves millions of investors and brokerage clients.
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