The Hg Exchange consortium: Juzar Motiwalla (Zilliqa), Gerald Ong (PrimePartners), Luke Lim (PhillipCapital), Khai Lin Sng (Fundnel), Kelvin Lee (Fundnel), Richard Teng (Hg Exchange) and Benjamin Twoon (Fundnel).
SINGAPORE, 14 September 2020 — Hg Exchange (“HGX”), today announced that its founding members, PhillipCapital, PrimePartners and Fundnel, have commenced trading private company shares on the live exchange. It also officially named Mr Richard Teng as Chairman.
HGX is Southeast Asia’s first member-driven private exchange which officially entered the Monetary Authority of Singapore (“MAS”) fintech regulatory sandbox on 22 June 2020. HGX sets the wheels in motion for its members and their clients — comprising both investors and issuers — to gain global liquidity and access opportunities in funds, high-growth companies and other alternative private assets.
Private exchanges are emerging rapidly in the financial hubs of the world, in tandem with market participants’ shift towards private capital markets. Through a unique consortium strategy, HGX automatically unites 500,000 investors online, setting itself apart in establishing a head start over similar platforms. HGX will spur a synergistic effect for all parties, by increasing deal velocity in a timely, cost-efficient manner and introducing liquidity to the ecosystem. Additionally, by leveraging its members’ extensive network of established brokers and dealers, HGX can rapidly penetrate the markets to gain a foothold in the region.
Mr Teng said, “Private capital markets have been steadily gathering momentum in deal volume and the vibrancy in activities surpasses its public counterparts. We are harnessing our strength to further transform the ecosystem by offering the market with greater liquidity options.”
Known for demonstrating agility in uncovering opportunities to drive results, Mr Teng will facilitate the team in accelerating HGX’s growth to address demand from the ground. “As we continue to welcome more renowned financial institutions to join us as members, with each bringing a pool of buyers and sellers, HGX’s world class platform will assist stakeholders in overcoming problems associated with illiquid assets,” he added.
Mr Teng possesses a wealth of experience in the capital markets and most recently served as CEO of the Financial Services Regulatory Authority at Abu Dhabi Global Market. Prior to that, he was the Chief Regulatory Officer of the Singapore Exchange. Mr Teng started his career at the MAS where he served for 13 years.
Private securities, global liquidity
The MAS has also granted HGX the opportunity to pioneer the listing and trading of both digital and non-digital Capital Market Products (“CMPs”), giving investors and issuers the freedom of choice.
HGX leverages advanced blockchain technology to digitise assets for unrivalled efficiency, which brings forth the possibility of trading in smaller lots at a fraction of the charges associated with a public listing. This, in turn, greatly benefits issuers who seek partial liquidity or own a limited amount of shares, including employees of private companies with equity, gained via Employee Share Option (“ESOP”) or Employee Share Ownership (“ESOW”) plans.
HGX offers the full spectrum of services — onboarding, verification and custodising of securities — to facilitate digital transactions. Additionally, the one-off procedure, via the blockchain, allows investors to conduct subsequent sale of the same lot, through HGX, with ease.
Non-digital trading options are available to buyers and sellers making their first foray into this realm of digitised securities. The blend of established trading practices with disruptive technology paves the way for a bespoke investment solution. More importantly, it enables issuers to capitalise on HGX’s vast network of investors, brokers and dealers, while they trade in a way most familiar to them.
Eradicating information asymmetry for investors
As more companies delay their IPOs, opportunities are abound in the private capital markets. However, there are high barriers to entry for new participants. Apart from lack of access, interested parties are also confronted with information asymmetry.
HGX eliminates these barriers by equipping investors with information and perspectives. Through a partnership with a third-party investment research company, HGX will provide individuals with deep insights, with the goal of empowering them to make well-founded decisions.
HGX will dedicate its time and resources to delve into market movements and, by utilising an iterative approach, finetune its services for the benefit of the wider buyer and seller network.
Centred around a member-driven ethos, it also anticipates welcoming financial institutions from the region joining in as members and tabling their sets of challenges and observations from different vantage points. As trading activity increases, HGX will also harness the experience to deepen its capability in making trading of private securities efficient and secure.