Gibraltar Stock Exchange Opens the Doors to Security Tokens

The Gibraltar Stock Exchange (GSX) is ready to list security tokens also known as ‘digital’, ‘smart’ or ‘tokenised’ securities becoming one of the world’s first stock exchanges to offer the listing services of digital debt securities and digital funds.

The GSX will list corporate Bonds, Convertible Bonds, Asset-Backed Securities, Derivative Securities, Open-Ended Funds, Closed-Ended Funds under its current licensing permissions, on the GSX Global Market.

This is the beginning of the much-anticipated wave of secondary markets for security tokens much needed for creating liquidity for the many Security Token Offerings (STOs) that have taken place in 2018 and 2019.
Nick Cowan, CEO of the GSX Group:

“This is a historic moment for GSX, we have worked incredibly hard to reach this point, and we are now at the precipice of a truly transformational period for the capital markets. We now have an unparalleled opportunity for the GSX to become a frontrunner in the emerging digital securities market. We’re pioneering meaningful change, for the betterment of the global financial industry, we have come so far already, and this is only just the beginning.”

Since the inception of the regulated and insured Gibraltar Blockchain Exchange (GBX), the GSX has always maintained its position to be one of the first traditional stock exchange’s to break into the innovative prospects of blockchain technology.

As part of a phased approach in 2017, the GSX began working towards the aim of being a DLT enabled exchange for conventional securities, recognising the tremendous potential presented by the nascent technology. Following the recent successful deployment of the ‘GSX Prototype demo bond’, using the STACS Network, (created by Hashstacs Inc, a GSX Group joint venture), the GSX will offer companies the unique opportunity to list digital representations of funds and debt on the blockchain.

The GSX, applying DLT, will be able to open up greater liquidity pools, making illiquid assets more accessible, and set the foundations to democratise the capital markets, that have gone largely unchanged in technology for decades. With the STACS Network, the legacy systems of T+3 will become significantly reduced, with an immutable ledger for greater transparency, fully auditable smart contracts, regulatory oversight, efficient settlement, and high efficiency, low-cost opportunities for issuers.

GSX Global Market is a practical listing venue option for issuers offering reduced timelines and listing costs, with lighter reporting and disclosure framework than the GSX Main Market. A major benefit for debt issuers with securities listed on the GSX Global Market is that they are not obliged to withhold tax on coupons under UK law. This is because the GSX Global Market is operated by a recognised stock exchange (the GSX Main Market) regulated in an EEA territory.