ADDX – formerly known as iSTOX – expects to enlarge its business in China significantly after it concluded an agreement tied to the government-granted quota for Chinese offshore investments, the company said in a statement.
The digital securities exchange has reached an arrangement with the Singapore-regulated wealth and fund management company ICHAM, which has received a $200m allocation as part of the Chongqing government’s overall $5bn qualified domestic limited partnership (QDLP) quota.
The QDLP scheme allows domestic investors in China to buy into renminbi funds that focus on overseas investment opportunities. Fund quotas are allocated through a few major cities – including Beijing, Shanghai, Shenzhen and Chongqing.
Under the agreement, ADDX will be the primary venue for investments from the ICHAM fund in China authorised to raise capital from Chinese institutions and individuals.
“The opening up of official channels like QDLP to allow Chinese investors to diversify their portfolios globally has been taking place gradually and steadily since the 2000s. Amid rising asset prices within China, this move by the Chinese authorities is a prudent one that empowers Chinese institutions and high-net-worth individuals to participate in high-quality opportunities wherever they are,” Oi Yee Choo, chief commercial officer of ADDX, said in a statement.
ADDX will offer Chinese investors access to private market products issued in the form of digital securities covering a broad range of asset types, including pre-IPO equity, hedge funds, venture capital funds, real estate funds, wholesale bonds and structured products.
The ADDX-ICHAM partnership was among the first batch of two QDLP quota recipients announced by the Chongqing government last month. ICHAM is also the first Singapore company to secure a QDLP allocation in any Chinese city. ADDX and ICHAM were both founded by ADDX chief executive officer Danny Toe.
Singapore-regulated ADDX is building a private market exchange with blockchain and smart contract technology.
