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The new capital markets




After the bitcoin rally, the financial world took notice and started getting involved in the field. It was only a matter of time before the first financial products started to take shape, first with the ICOs (initial coin offerings) and then with the securities token offerings (STOs) or equity token offerings (ETOs).

The 1.8 billion STO market started to pick up pace last year and in 2019 we will see an acceleration of this trend. The STO is so attractive because for the first time we can bridge the distributed ledger technology (DLT) space with the financial one under a regulated environment. This evolution will allow small and medium companies that until now could not afford it to go public and raise money to do so at a reasonable cost and in a reasonable time frame.

STO/ETO vs IPO

The main problem with the ICOs was that they were unregulated, and this created a major weakness that prevented this method of raising capital to go mainstream.

The natural consequence was therefore to create tokenized securities. They have the same advantages as ICOs but with the security of IPOs. Of course, this created challenges and opportunities alike. The main opportunity has to do with access and the main challenge is the regulatory environment and liquidity.

Through our advisory division, Ecovis Ciurtin & Associates is currently advising a Romanian energy supplier on executing an STO of 200m EUR. In this role we are dealing with every aspect of this process.

In this process we identified two aspects that need to be addressed in order to streamline the wider adoption of DLT technology, legislation and human resources. The most critical aspect is the regulatory framework, not only for the lack of new legislation but also for the lack of convergence with the old one. The other problem is the lack of human resources available with relevant expertise.

We have seen some progress in these two areas in some countries across the world like Malta, Gibraltar, Switzerland and Singapore but the jurisdictions where the large financial centers are situated are moving at a much slower pace.

However, the tide is changing, and more countries are becoming crypto friendly, integrating this new technology into their financial markets. As a result, we expect in the following years both the regulatory framework and convergence within the legislative process to accelerate, firmly establishing DLT technology as one of the bedrocks of our financial digital world and beyond.

The advantages of security tokenized issues

Advantages for companies:??????????????????????????????????????????????????????????????????????????????????????????????

much lower costs than IPOs

automated KYC and AML procedures (including accredited investors checks)

lower entry barrier

access to a bigger pool of investors

Advantages for investors:

regulatory protection

greater transparency

real time settlements

real time access to a company?s financial information

Author

Valentin Gheorghiu Ba?rga?u, Partner, Expert in Capital Markets & Blockchain, ECOVIS CIURTIN & Associates Advisory, Bucharest, Romania

Email: v.bargau@ciurtin.ro

Das Beratungsunternehmen Ecovis unterstützt mittelständische Unternehmen. In Deutschland zählt es zu den Top 10 der Branche. Etwa 7.500 Mitarbeiterinnen und Mitarbeiter arbeiten in den mehr als 100 deutschen Büros sowie weltweit in Partnerkanzleien in über 75 Ländern. Ecovis betreut und berät Familienunternehmen, inhabergeführte Betriebe sowie Freiberufler und Privatpersonen. Um das wirtschaftliche Handeln seiner Mandanten nachhaltig zu sichern und zu fördern, bündelt Ecovis die nationale und internationale Fach- und Branchenexpertise aller Steuerberater, Wirtschaftsprüfer, Rechtsanwälte und Unternehmensberater. Jede Ecovis-Kanzlei kann auf diesen Wissenspool zurückgreifen.

Darüber hinaus steht die Ecovis Akademie für fundierte Ausbildung sowie für kontinuierliche und aktuelle Weiterbildung. All dies gewährleistet, dass die Beraterinnen und Berater ihre Mandanten vor Ort persönlich gut beraten.

www.ecovis.com





Posted by on 30. September 2019. Filed under Internet. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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