EC-TSM FAQs

FAQ’s: Your Questions Answered.  

1. What is a Tokenized Security?  

• A tokenized security is a digital representation of a traditional financial asset, such as stocks or bonds, on a blockchain. This allows for easier transfer, increased liquidity, and fractional ownership while maintaining regulatory compliance similar to traditional securities. 

2. Are Tokenized Securities Regulated? 

• Yes, EC tokenized securities are subject to financial regulations similar to traditional securities. Issuers must comply with securities laws and regulations in the jurisdictions where they operate, and investors have similar protections as they would in traditional markets. The Eastern Caribbean Securities Regulator Commission is the Regulator for the EC-TSM. It operates under the Securities Act enacted in all eight ECCU member countries, namely: Anguilla; Antigua and Barbuda; Dominica; Grenada; Montserrat; Saint Lucia; St. Kitts and Nevis and St. Vincent and the Grenadines. 

3. How Do I Invest? 

To invest in tokenized securities on the EC-TSM, you need to contact one of the licensed, ECSE member Broker-dealers to set up your account.  The Broker-Dealer will review and approve your application, provide the necessary onboarding so that you can access your digital wallet online and place your buy or sell orders directly. 6. What Are the Risks Involved? 

• Risks may include market volatility, cybersecurity threats, and liquidity challenges. As with any investment, it’s essential to speak with a broker dealer, conduct thorough research and consider your risk tolerance before investing. 

4. Can I Sell My Tokenized Securities Anytime? 

• While tokenized securities can be traded on secondary markets, liquidity may vary depending on the asset and market conditions. Some tokenized securities might have lock-up periods or restrictions on when they can be sold. 

5. What is the Difference Between Tokenized Securities and Cryptocurrencies? 

• Tokenized securities represent ownership in real-world assets like stocks or real estate, while cryptocurrencies are digital assets that may not be backed by any physical asset. Tokenized securities are regulated and offer legal rights, whereas many cryptocurrencies do not. 

6. How is My Investment Secured? 

• Investments in tokenized securities are secured using blockchain technology, which provides a transparent and tamper-proof record of transactions. Additionally, regulatory oversight and smart contracts help ensure that investor rights are protected. 

7. What Happens If the Underlying Asset of a Tokenized Security Loses Value? 

• If the value of the underlying asset decreases, the value of the tokenized security will likely decrease as well. Investors in tokenized securities are subject to the same market risks as those holding traditional securities. 

8. Do I Need a Digital Wallet? 

• Yes, you typically need a digital wallet to store, send, and receive your tokenized securities. The wallet stores the private keys required to access and manage your tokens on the blockchain. 

9. How Do Dividends or Earnings Work on the EC-TSM? 

• Dividends or earnings from tokenized securities are usually distributed automatically through smart contracts on the blockchain. These payments are made in accordance with the terms set out by the issuer of the tokens. 

10. Can Tokenized Securities Be Used as Collateral? 

• Yes, tokenized securities can potentially be used as collateral for loans or other financial agreements, depending on the terms set by the lender and the platform. This can provide additional liquidity and financing options for investors. 

EC-TSM Investors

BENEFITS FOR INVESTORS  

• 24/7 Trading  

• Increased Liquidity 

• Lower Fees 

• Global Access 

• Enhanced Security  

• Faster Settlements  

• Automated Compliance 

• Portfolio Diversification 

Getting Started  

Step 1: Create an Account 

Contact a Regulated Broker-Dealer Sign up for an account by providing personal information, verifying your identity (KYC), and completing any required compliance checks. 

Step 2: Fund Your Account 

Deposit funds into your account. After depositing funds, your account balance will reflect the available amount for trading. Some platforms might also require you to convert your funds into a stablecoin or specific cryptocurrency for trading. 

​​​Step 3: Start Trading Tokenized Securities 

Browse the available tokenized securities on the platform. Research the assets you’re interested in, such as tokenized stocks or bonds. Place buy or sell orders based on your investment strategy. Once your order is matched with a seller or buyer, the transaction will be processed, and your digital wallet will be updated with the tokenized securities you purchased. 

Securities Listed/Available on the EC-TSM:  

Learn more about these bonds, companies/IPO’s

EC-TSM Issuers

BENEFITS FOR ISSUERS  

• Access to a Broader Investor Base 

• Increased Liquidity 

• Lower Issuance Costs 

• Faster Capital Raising 

• Market Access  

• Enhanced Transparency 

• Regulatory Compliance Automation 

• Customizable Securities 

• Global Reach 

• Efficient Asset Management 

• Real-Time Data and Reporting 

Getting Started  

Step 1: Engage a Regulated Broker-Partner with a regulated broker-dealer to facilitate the tokenization process, manage investor relations, and assist with regulatory filings. 

Step 2: Tokenization and Platform Listing – Convert the company’s assets into digital tokens and list them on the EC-TSM, making them available for trading. 

Licensed Broker Dealer Members

Meet EC-TSM’s Broker Dealer Members: 

The EC-TSM operates under a comprehensive regulatory framework, ensuring that all processes are conducted with utmost transparency and accountability. The EC-TSM is regulated by the Eastern Caribbean Securities Regulatory Commission (ECSRC). The use of blockchain and other digitization technology adds additional layers of protection providing preventive measures to potential market manipulation giving strong investor protection and issuer confidence. Licensed member broker-dealers are the market intermediaries that facilitate market transactions on behalf of issuers and investors.  

Licensed Broker Dealers

About the EC-TSM Platform

The EC-TSM platform is designed with several security features to protect investors and ensure the integrity of transactions. Here’s how:

1. Blockchain Technology

Transactions are recorded on a blockchain, creating an immutable and tamper-proof ledger. Once a transaction is recorded, it cannot be altered or deleted, reducing the risk of fraud and tampering. Blockchain networks are decentralized, meaning there is no single point of failure. This decentralization helps protect against hacking and system failures.

2. Smart Contracts

Smart contracts are self-executing agreements coded into the blockchain that automatically enforce the terms of the securities, including compliance with regulations and transaction rules. By automating processes, smart contracts minimize human errors and reduce the potential for fraud.

3. Cryptographic Security

Blockchain uses advanced cryptographic techniques to secure data, including public-key cryptography for secure transactions and identity verification. Private keys are required to access and manage tokens, ensuring that only authorized parties can control or transfer assets.

4. Regulatory Compliance

Our tokenized securities platform incorporates Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures to verify the identities of participants and prevent illegal activities. Blockchain provides a transparent and auditable record of all transactions, making it easier to monitor and verify compliance with regulations. The overall EC-TSM will be regulated by the regional regulator, the Eastern Caribbean Securities Regulatory Commission (ECSRC).

5. Secure Wallets

Tokens are stored in digital wallets with robust security features, such as multi-factor authentication (MFA) and encryption, to protect against unauthorized access.

6. Network Security

Blockchain networks use consensus mechanisms (e.g., Proof of Work, Proof of Stake) to validate transactions and maintain network security, making it difficult for malicious actors to alter transaction records. Our platform undergoes regular security audits and vulnerability assessments to identify and address potential risks.

7. Robust Infrastructure

Our platform has redundant systems and backup procedures to ensure data integrity and availability even in the event of technical issues.

BENEFITS OF THE EC-TSM:

Increased Liquidity: EC-TSM allows for large, traditionally illiquid assets like private equity to be divided into smaller, more tradable units. This fractionalization enables a broader investor base and more frequent trading, thereby increasing liquidity.

24/7 Trading: Tokenized assets can be traded on the EC-TSM platforms 24/7, unlike traditional markets that operate within specific hours.

Greater Accessibility: On EC-TSM, investors can buy fractions of high-value assets, making it easier for smaller investors to participate in markets. Tokenized assets can be bought and sold by anyone with internet access, enabling global participation and diversifying the investor base.

Improved Transparency: Blockchain technology ensures that all transactions are recorded on a transparent and immutable ledger, providing a clear and auditable history of asset ownership and transactions. Provides real-time market capitalization.

Enhanced Efficiency: EC-TSM leads to faster settlement times and significantly reduces administrative overhead and operational delays.

Portfolio Diversification: Investors can more easily diversify their portfolios by acquiring small stakes in a wide range of tokenized assets, spreading risk across multiple sectors.

Innovation in Financial Products: Issuers can create tailored financial products that meet specific investor needs, such as tokenized derivatives or hybrid tokens that combine features of equity and debt.

Friendly for Early-Stage Companies. Low-cost platform, streamlined, and no naked costs.

Regulatory Compliance: Integrated KYC/AML – incorporates Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols directly into the tokenization process, ensuring that all participants comply with regulatory standards.

EC-TSM Broker Dealer

Broker Dealer Profiles – click on company name to view profile

Profiles

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