First STO in Japan by SBI Group
SBI Holdings has announced the first Security Token Offering (STO) in Japan yesterday.
STO is a scheme in which issuers raise funds using “security tokens,” which are securities issued using electronic means such as blockchain, instead of conventional stocks and corporate bonds.
In Japan, due to the revision of the Financial Instruments and Exchange Act on May 31, 2019 and the revision of related government ordinances, it has been stipulated as the “right to display securities for electronic record transfer, etc.” After the enforcement of the revised Financial Instruments and Exchange Act on May 1, 2020, the SBI Group will start the first STO business in Japan as follows. While the first issuance will be handled with SBI Holdings as underwriter, the second initiative, a public offering of digital corporate bonds, will be issued by the respective operating company, and the third, the public offerings of fund type will be handled by SBI Securities. Both will require approval of the relevant government agencies.
Capital increase through third-party allotment
SBI e-Sports will implement a third-party allotment of shares using STO with SBI Holdings as the underwriter on October 30, 2020 (scheduled). The digital shares issued will be issued and managed using the blockchain platform “ibet” provided by Boostry — a joint venture between financial services firm Nomura [66%] and technology provider Nomura Research Institute [34%] launched in September 2019, ownership structure changed to Nomura 56%, NRI 34% and SBI Holdings 10% with the latter’s July 2020 investment — and token transfer, rights transfer, and stock list updates will be managed electronically.
Public offering of digital corporate bonds issued by operating companies
SBI Holdings are considering the public offering of digital corporate bonds issued by operating companies within the group through SBI Securities,where SBI Securities will act as the underwriter of the digital corporate bonds and solicit acquisition of SBI Securities customers. It is assumed that the digital bonds will also be issued and managed using the ibet platform.
Fund-type public offering
SBI Securities is considering the handling of fund-type STOs based on the Trust Law and the Asset Liquidation Law. The assets under consideration for such funds are — for example — real estate, fine arts, and intellectual property rights such as copyrights for games and movies. By participating in the STO, investors will be able to become owners of specific assets with only a small investment, and issuers will be able to raise funds for their own assets. By giving investors who participated in the STO benefits related to the asset (e.g., distributing merchandise to STO participants who invest in the copyright of the movie), it offers more than just financing, it will allow for further customer attraction & retention. We expect that it will contribute to the creation of new business opportunities.
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