The latest offerings in investments, such as funds and structured products, and other notable developments.

Financial services company Tokai Tokyo Financial Holdings and Singapore-regulated private market exchange ADDX have announced a new partnership to offer fractional private market investment products to investors in Japan. The move went ahead of Tokai Tokyo securing a security tokens licence from the Japanese regulator.

Tokai Tokyo offers investment and trading services to investors via its Japanese offices network. It holds $38 billion of client assets under management.

Last month, Tokai Tokyo received a licence from the Japanese regulator – the Financial Services Agency (FSA) – allowing the company to deal in security tokens, also known as digital securities. With the new licence, Tokai Tokyo and ADDX plan to collaborate on security token issuances by Japanese real estate companies and banks. These future deals will be tokenised on the ADDX platform before being distributed by Tokai Tokyo to sophisticated investors in Japan. 

In addition, Japanese investors will be able to trade the digital securities on the ADDX secondary exchange through Tokai Tokyo, the organisations said in a statement late last week. 

With this new business partnership, ADDX said it “expects a significant increase to its revenue from the Japanese market.” Under the tie-up, Tokai Tokyo said it will be the first company in Japan to distribute security tokens that are tradeable on a secondary exchange. 

The groups’ partnership started in 2019.

Digital securities are securities which are issued using blockchain and smart contract technology. Advocates of such technology argue that digital securities are more efficient to administer because the technology reduces the need for intermediaries and they automate manual processes. Furthermore, they say that the efficiency of blockchain allows minimum ticket sizes for private market products to be reduced from $1 million to $10,000, expanding access for accredited investors to previously out-of-reach assets, including funds, bonds and pre-IPO equity. 

In late September, ADDX said that it had tokenised an allocation to a global private equity fund by the Switzerland-listed Partners Group. 

A tokenised asset such as private equity is wrapped in a tradeable piece of code. A blockchain token is issued for each asset which forms a digital representation of the asset. The token may represent the asset in whole or in part. It allows investors to own small pieces of an investment.