Clifford Chance

Singapore

Hong Kong

Qualifying Issuer

• Companies and non-bank financial institutions with an Asian nexus

• No requirement as to issuer type or location

Qualifying Issuance

• Declares itself to be a Qualifying Debt Security (in accordance with the Income Tax (Qualifying Debt Securities) Regulations)

• No requirement other than meeting the Basic Requirements (at minimum) or both Basic Requirements and Additional Requirements

• Issued on a designated digital asset platform in Singapore

• As part of the Basic Requirements, either:
  • The team involved in the development and/or operations of the DLT platform and other digital aspects of the issuance must have a substantial Hong Kong presence; or
  • The digital bonds will be issued on a DLT platform operated by the Central Moneymarkets Unit (CMU)
• As part of the Additional Requirements:
  • The DLT platform must not be provided by an entity that is an associate of the issuer; and
  • At issuance, must be issued to 5 or more investors that are not associate(s) of the issuer or the DLT platform provider.

• Listed on the SGX or a designated digital platform

• As part of the Additional Requirements, must be listed:
  • on the Hong Kong Stock Exchange (SEHK); or
  • a virtual asset trading platform (VATP) licensed by the Securities and Futures Commission (SFC)

• Substantially arranged by licensed entities in Singapore

• As part of the Basic Requirements, half or more of the involved lead arrangers must be recognised arrangers, generally defined as those with a substantial Hong Kong debt capital markets operation

• Aligned with internationally recognised digital bond standards

• No requirement for bond standards

• Minimum issuance size of S$100 million (approximately HK$575 million)
• Where the issuance size is at least S$200 million, the bond must be digitally native

• As part of the Additional Requirements, minimum issuance size of HK$1 billion (all tranches combined)
• No requirements that bond must be digitally native

• When the tenure is at least 1 year, the issue must be joint led by at least 2 specified licensed entities in Singapore

• No requirement with regards to tenure of the bonds, other than meeting the Basic Requirement above that half or more of the involved lead arrangers must be recognised arrangers in Hong Kong

• Denominated in Asian local or G3 currencies (USD, JPY or EUR)

• No requirement for currency

Number of Grants

• Maximum of two

• Maximum of two for each issuer, which includes its associates.

Eligible Expenses

• Arranger fees
• Audit fees
• Credit rating fees
• Legal fees
• Listing agent fees
• Listing fees
• Platform fees
• Fees under the G-ADBGS are not limited to parties in Singapore, unlike the DGBS, which limits reimbursement of fees to parties located in Hong Kong.

• Fees to Hong Kong-based arrangers, excluding associates of the issuer
• Fees to Hong Kong-based auditors, accountants and rating agencies
• Fees to Hong Kong-based legal advisers
• Listing fees to the SEHK or VATPs licensed by the SFC
• Fees to DLT platform providers, excluding associates of the issuer
• CMU lodging and clearing fees
• Digital bonds that are also green and sustainable bonds may only have fees reimbursed by either the DGBS Scheme or the Green and Sustainable Finance Grant Scheme, but not both.

Expense Funding Level

• 30% for each issuance, capped as per the below

• 50% for each issuance, capped as per the below.

Expense Cap Tier

• S$250,000 (approximately HK$1.4 million) where the initial principal amount issued is S$100 million.
• S$450,000 (approximately HK$2.5 million), where the initial principal amount issued is S$200 million.

• HK$1.25 million (Half Grant): if the issuance meets the Basic Requirements (i.e., the minimum to qualify for the DGBS).
• HK$2.5 million (Full Grant): if the issuance meets both the Basic Requirements and the Additional Requirements.

Scheme Validity Date

• 31 December 2029

• Three years from the application start date. The application start date was 28 November 2024, but application was allowed for bonds issued on or after16 October 2024 (the date of the policy address announcing the DGBS).

Application Process

• No pre-application consultation noted
• Submit applications no later than 3 months after the issue date

• Prior to or after the issuance, the issuer, the lead arranger(s) and/or the DLT platform provider may initiate a pre-application consultation with the HKMA before submitting a formal application.
• Formal application may be made by the issuer, the lead arranger(s) and/or the DLT platform provider within 3 months of the issue date.