Swiss Stock Exchange SIX Lines up Buyers for ‘Initial Digital Offering’
Swiss Digital Exchange (SDX), the blockchain-based utility owned by Swiss stock exchange company SIX Group, has organized a global consortium of financial institutions to back its “initial digital offering” (IDO).
Now slated for the middle of next year, the IDO would be like a traditional IPO, except that the shares are to take the form of security tokens issued on SDX’s platform.
Thomas Kindler, who recently took over as head of SDX, used the term “consortium” to describe the cohort of investors, which includes banks, buy-side firms and market infrastructure providers because the goal is to legitimize the technology as well as raise capital.
Kindler told CoinDesk:
“We are not just looking to Abu Dhabi sovereign wealth fund to give us money. We are looking at our clients to invest, but at the same time commit business and help us validate what we built and get it off the ground. The key focus is not money; it’s money linked to business and validation of the business model.”
Kindler would not name any of the consortium members. Nor would he give any indication of how much money SDX was looking to raise. SIX would keep the majority of equity in SDX, he said.
“There is clearly interest in the market,” said Kindler. “What we foresee are two levels. On one large level … we are looking at, say, four or five-ish large investors. Then potentially ten-ish smaller investors.”
SDX is wholly owned by SIX Group, an unlisted public limited company based in Zurich. SIX Group is itself owned by around 120 domestic and international financial institutions, which are also the main users of its services.
By debuting its own SDX security
token, the blockchain-based exchange will be eating its own dog food, to use a well-worn expression.
“We want to set a standard so we would go live on our own exchange obviously, and that would be a native asset token,” said Kindler.
Tokenizing equity in the form of unlisted shares in a fully regulated environment is complex, a fact attested to by firms such as Nivaura, which has been working on this in the U.K. Financial Conduct Authority’s sandbox with the help of the London Stock Exchange Group.
The SDX digital equity token will be issued on a blockchain built using the enterprise version of R3’s Corda technology. Asked about secondary markets or how the tokens might connect to other consortium members, Kindler said he was limited in what can be divulged at this time.
“We are looking at a two-phased approach,” he said. “As a first step, we are looking at an international consortium of investors. The second step would be our own issuance.”