Singapore promotes broader adoption of digital bonds through Global-Asia Digital Bond Grant Scheme (G-ADBGS)
21 January 2025

21 January 2025
The MAS launched the G-ADBGS to promote the issuance of digital bonds, which are bonds issued on a digital platform using distributed ledger technology (DLT) that enables the automation of operational, settlement and asset servicing processes.
This scheme comes in quick succession after the Hong Kong Monetary Authority (HKMA) launched its Digital Bond Grant Scheme (Hong Kong DBGS) on 28 November 2024, as per our earlier publication. This is a testament to the strong confidence in digital bonds shown by the financial regulators of two major Asian financial hubs. Regulators have cited confidence in issuance of bonds on digital platforms using DLT as having the potential to improve operational efficiency and lower costs.
Noticeably, the G-ADBGS allows digital bonds to be issued on a designated digital asset platform in Singapore without specifying any Singapore based central securities depositary or if the development of such platform is by a Singapore-based provider. The Hong Kong DBGS requires digital bonds to be issued on a DLT platform operated by the Central Moneymarkets Unit (CMU), the debt securities settlement system operated by the HKMA or a DLT platform developed and operated by a digital team with substantial Hong Kong presence. Further, the eligible expenses that Hong Kong DBGS largely covers are the costs of Hong Kong-based intermediaries while the G-ADBGS does not restrict to costs of Singapore-based intermediaries, thereby potentially involving global participants.
The subsidies provided are in two tiers and quantum is similar across both schemes.
The details of the G-ADBGS are as follows and are framed comparatively to the Hong Kong DBGS:
Grant categories | Details of the G-ADBGS | Details of Hong Kong DBGS |
Qualifying issuer | Companies and non-bank financial institutions with an Asian nexus. |
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Qualifying issuance | Declares itself to be a Qualifying Debt Security. (Conditions under the Qualifying Debt Securities Scheme are set out in the Income Tax Act and Income Tax (Qualifying Debt Securities) Regulations) |
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Substantially arranged by licensed entities in Singapore. |
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Issued on a designated digital asset platform in Singapore. |
*Note that the Basic Requirements must be met in full to at least qualify for the Half Grant.
*Note that the Basic Requirements and ALL Additional Requirements must be met to qualify for the Full Grant. | |
Listed on the Singapore Exchange (SGX) or a designated digital asset platform. |
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Aligned with internationally-recognised digital bond standards. | No such requirement | |
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Where the tenure is at least 1 year, the issue must be joint-led by at least 2 specified licensed entities in Singapore. |
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Denominated in Asian local or G3 currencies (being USD, EUR and JPY). |
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No such requirement |
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Eligible expenses | (a) Arranger fees; (b) Audit fees; (c) Credit rating fees; (d) Legal fees; (e) Listing agent fees; (f) Listing fees; and (g) Platform fees | (a) Hong Kong-based arranger fees, excluding arrangers that are associates of the issuer; (b) Hong Kong-based auditors, accountants and rating agencies fees; (c) Hong Kong-based legal advisors fees; (d) Listing fees to the SEHK, or VATPs licensed by the SFC; (e) CMU lodging and clearing fees; and (f) Fees to DLT platform providers, excluding DLT platform providers that are associates of the issuer Expenses covered by other grant scheme(s) in Hong Kong or outside Hong Kong will be excluded. See our earlier publication for further details. |
Per-issuance cap | Quantum of subsidies is capped at two tiers, each similar in amount to the Hong Kong DBGS. The two tiers depend on the issue size.
| Quantum of subsidies is capped at two tiers, each similar in amount to the G-ADBGS. The two tiers depend on if Additional Requirements are met.
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Other aspects of the schemes | Details of the G-ADBGS | Details of Hong Kong DBGS |
Number of grants under the scheme | Two qualifying digital bond issuances. |
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Validity of the scheme | valid till 31 December 2029. |
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Application process | Interested parties can write to fsdf@mas.gov.sg for more information. |
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Applicants of Global-Asia Digital Bond Grant Scheme should submit their applications no later than 3 months after the issue date. |
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Ashurst is at the forefront of the bond digitalisation journey in Asia and globally. Our transactional advantage is supported by deep fintech regulatory expertise and we are exceptionally placed to provide legal advice and support to issuers, dealers, digital teams, custodians/agents, platform providers and operators. Our experience in digital bonds and payments includes advising:
Our recent awards include the following:
Please contact us to learn more about the grant schemes, digitalisation and more.
With thanks to Zoe Chan (Trainee) for her contribution to this article.
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