VCC structure was introduced by the Monetary Authority of Singapore (MAS) and the Accounting and Corporate Regulatory Authority (ACRA) in January 2020 to encourage more investment funds to be domiciled in Singapore. The VCC is a new corporate entity structure under which multiple funds or collective investment schemes (whether open-end or closed-end) may be gathered under the umbrella of a single corporate entity and yet remain ring-fenced from each other. For this structure to meet the future needs of investment managers, investors, and service providers and compete sustainably with similar legal structures in other popular fund jurisdictions such as Cayman and BVI, it needs to enable tokenization capability to offer more operational benefits to the VCC fund’s stakeholders. Tokenization of fund interests not only allows fund managers to access a new distribution channel powered by distributed ledger technology (DLT) that offers tradability of private market assets but also offers increased efficiencies and cost savings for lifecycle management of parent fund and sub-funds. InvestaX collaborated with UBS, StateStreet, CMS, PWC and the Tezos Foundation in Singapore to launch the first e-VCC. The objective of the e-VCC Project was to determine the benefits and challenges for fund managers in using an e-VCC structure as well as offer potential solutions to the identified challenges. Some of the key findings of the e-VCC project are:
- Blockchain-native fund share (token) can bring efficiencies and benefits to the fund management industry, such as reduction of intermediaries and fixed costs, removal of redundant processes, increased transparency, and faster settlement
- Tokenization of a VCC is applicable at both umbrella VCC level and sub-fund VCC levels
- The newly established VCC legislation is structured in a way that could enable blockchain-native token issuance and facilitate secondary market trading of these on digital securities exchanges such as InvestaX
- Some of the functions of fund administrators and corporate secretaries could be digitalized and streamlined under the adoption of e-VCC. That said, both stakeholders are playing key roles in managing the daily operations of the e-VCCs
To help our industry partners and interested parties further understand the potential benefits of adopting e-VCC as their fund issuance structure, InvestaX, and our e-VCC project working group hosted a webinar to share what we discovered from our POC journey, and points of consideration when the adopter is setting up their own e-VCC fund. Tokenization of a VCC can be done at both an umbrella VCC Level and sub-fund VCC Level. Learn how to tokenize your VCC at investax.io. Reach out to us at email@example.com to schedule a consultation call.
InvestaX is a Monetary Authority of Singapore (MAS) licensed digital securities platform based in Singapore offering end-to-end solutions for the issuance, trading, and custody of digital securities for real estate, private equity, and other alternative investments. Founded in 2015, InvestaX is an early pioneer in the use of blockchain technologies to develop leading technology-driven investment vehicles called digital securities offerings, removing friction and delivering secondary market trading. To date, the company has listed more than 28 private equity offerings that are jointly valued over US$1 billion and had 16 successful exits.
At InvestaX, we offer the leading Singapore Licensed Tokenization Service-as-a-Software (SaaS) platform for Real World Asset Tokens (RWA) and Security Token Offerings (STO). We provide a one stop shop for tokenized assets for global investors, including real estate, private equity, venture, ESG, startup, private credit/debt and more. We also provide IX Swap, the first legal and compliant Automated Market Maker (AMM) for RWA and STO.
If you are interested to learn more about how you can build your business on top of our infrastructure and what we can offer you as your tokenization partner, then contact us here. Thank you.