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MERJ Joins With Globacap to Offer Tokenized Securities to EU Investors
Traders Magazine Online News, September 6, 2019
In a move to shape the future of financial markets, the first national stock exchange to list tokenized securities today announces its partnership with the UK’s first regulated platform to issue tokenized equity.
MERJ Exchange beat rivals to become the first fully-regulated exchange globally to list equity-security tokens in August. Now, the national stock exchange of the Seychelles plans an initial public offering of the tokens. It will partner with London-based Globacap to distribute the securities in the UK and Europe.
The alliance brings together two companies intent on introducing international governance standards and safety nets to the world of digital assets through fully compliant end-to-end infrastructure. In 2018, Globacap became the first company to issue an equity-security token under regulatory supervision of the UK’s Financial Conduct Authority.
“We will be the first entity anywhere in the world to hold an initial public offering of security tokens,” said Edmond Tuohy, CEO of MERJ Exchange. “For this ground-breaking event, it is essential for MERJ to have a partner on board with the right technology, systems and approach to grasp the significance of this milestone for financial markets. Globacap are among the leaders who are really executing in this space and that resonates well with us.”
With 8.7 million of its own shares listed on the Seychelles exchange in tokenized form, MERJ plans to offer 16% of the company’s share capital in its IPO, set for next month. Globacap, which uses distributed ledger technology for issuance and administration of tokenized securities, is a “natural fit” as both companies are applying blockchain technology to highly regulated financial markets, said Tuohy.
“Globacap and MERJ share a sense of mission to bring the efficiency and cost benefits of distributed ledger technology to the regulated financial markets arena,” said Globacap Founder and CEO Myles Milston. “MERJ has demonstrated unquestionable leadership and its IPO will be a landmark event in bridging regulated financial markets and the world of digital assets. We couldn’t be more excited to be a part of this journey.”
Blockchain is increasingly recognised as a stable and innovative technology that can transform the financial services sector, offering greater security and efficiency. Globacap’s platform brings securities issuance and administration into the digital world, while still complying with existing regulations.
MERJ is in active discussions with several companies planning to list their own digital securities on the Seychelles exchange. It is also in talks with some of the largest global tech companies about long-term partnerships in areas including tokenization, custody and key management.
Situated off the coast of East Africa, the Seychelles exchange developed as a result of the IMF and World Bank working with the islands government to build a financial services sector, while coordinating with agencies like the OECD and FATF to ensure compliance with the highest international standards. An affiliate member of the World Federation of Exchanges, MERJ is licensed by the Seychelles Financial Services Authority, which is an associate member of IOSCO.
MERJ has the unusual benefit that the group's licenses extend to operating the entire pre- and post-trade infrastructure, which includes clearing, settlement, registry and depository services. This has enabled MERJ to move more quickly than its competitors in adopting a framework necessary to build a digital assets exchange.
By applying distributed ledger technology to streamline processes, MERJ expects to help reduce costs both for issuers and investors. The direct access enabled by MERJ’s infrastructure limits the need for brokers or banks, making it especially attractive in the “mobile first” ecosystems of many emerging markets.
Listings on MERJ represent more than one-fifth of the national GDP of the Republic of Seychelles and include companies from across North America, Europe, Asia, Australia and Africa.
“We are all about merging the best of the old world with the best of the new to create a new paradigm in financial markets that builds value, trust and accessibility,” said MERJ CEO Tuohy. “We are creating processes that ultimately will democratize access to global capital markets for companies and investors.”
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