Corporate bond settlement processes could soon become faster in Thailand after the nation’s Security and Exchanges Commission gave their consent to a new blockchain project developed by the Thailand Bond Market Association (TBMA).
According to a local news outlet, a swift clearing and settlement system for corporate bond transactions will be the primary features of a blockchain-based bond registrar services proposed by the TBMA.
The self-regulatory organization is aiming to improve transparency, as well as cut down existing operational process from 7-10 days to a mere 1-3 days according to vice president Chaitat Prachuabdee.
The first phase of the project could begin next month following the green light by the Thailand SEC. It would involve the development of a bond registrar platform that would run on a smart contract. Hosted on a private blockchain, the platform will include a bond settlement information system, a bond subscription system and a verification system for bond transactions.
Once completed, the platform will only be available to registered members of the Thai Bond Market including issuers, regulators, registered companies, and general investors.
The penultimate phase is projected as a nine-month programme which is to be handled by the Thailand Securities Depository (TSD) and expected to bring bond deposit services to the innovative platform.
The report further revealed that a “Bond Coin” will be introduced as part of the clearing and settlement system during the last phase of the project. This move will likely reduce the involvement of financial institutions (third parties) operating within the Bond market and will be the final piece of the jigsaw in the agency’s plan to revamp the bonds market.
With the new system, bond issuers can check listed bondholders information in real-time along with demand for debt securities, while investors and users will be able to check total investment sums and bond conditions deposited within the registrar.
While it could take at least 24 months for the TBMA’s project to come become successful, it will definitely represent a significant lift to the bonds market, as the prospect of bond clearing and settlement happening immediately is expected to bring new bond issuers, investors to the market.
On the one hand, it is another triumph for blockchain technology, as it continues to lead the fourth industrial revolution.
