Blockchain registrar use under study
The Thai Bond Market Association (TBMA) is studying the use of blockchain technology for a bond registrar services platform for corporate bond transactions, with the aim of creating a "Bond Coin" for a swift clearing and settlement system.
The Securities and Exchange Commission has already agreed to the system in principle and full operations are expected next month.
The bond registrar service platform will be the first phase for blockchain technology being used for bond trading and information, said TBMA president Tada Phutthitada.
Services on the bond registrar platform include bond settlement information system, a bond subscription system and a verification system for bond transactions, said Mr Tada.
The platform, to be developed on a smart contract platform, will employ private blockchain, allowing only registered members like issuers, regulators, registered companies, and investors to use it.
The platform will also contain a bond fact sheet for information such as interest rates, interest payments and other conditions.
The second development phase involves servicing bond deposits, which will take nine months for programme development.
The third phase will structure Bond Coin, a clearing and settlement system that will be developed in the next 12 months.
Once all three stages are completed, bond clearing and settlement can happen immediately, instead of the existing settlement period of two days. Financial institutions, considered a middleman between bond traders and Thailand Securities Depository (TSD), will have no role in the clearing and settlement process.
Chaitat Prachuabdee, executive vice-president of TBMA, said this system will cut the existing operational process to 1-3 days from 7-10 days, with greater convenience and access to bond information.
The second development phase, which the TSD is in charge of, will offer bond deposits, said Mr Chaitat.
The final phase involves the creation of Bond Coin for clearing and settlement of the bond trading system, he said.
The bond issuing portal is a system where bond issuers can check listed bond holders in real-time along with demand for debt securities.
Through the bond investment portal, both investors and users will be able to check total investment sums and bond conditions deposited within the registrar.
The registrar portal allows bond issuers to check bondholders' information on a real-time basis such as interest payment schedules.