Sunrise PV Tech and Cathay Securities to issue Taiwan's first STO

According to a public announcement from the private solar power plant Suntech Home, they will collaborate with Cathay Securities to launch the "Sunshine Green Benefit Debt-type STO." This not only provides a novel way to engage green energy investors but also marks the first STO issuance case in Taiwan.

Sunshine Green Benefit Debt-based STO

Issuance Information

Taiwan's largest green energy private solar power plant, Sunshine Photovoltaic, announced yesterday that it will issue securities using the STO model for professional investors to invest in solar power plant pipelines. Cathay Securities will assist in the issuance, named "Sunshine Green Benefit Debt-based STO", with an expected fundraising amount of 30 million NTD.

The Sunshine Green Benefit Debt-based STO has a term of six years, with an annual interest rate of 3.5%, adopting an annual interest payment and principal repayment mechanism. To boost interest, Sunshine Photovoltaic offers investors who purchase tokens the opportunity to buy green energy at a relatively market-friendly price, thereby expected to increase the annualized return on investment to 5.8%.

This STO will end on December 8th, and investors must complete account opening and subscription within this period. On December 12th, tokens will be officially issued and traded in the secondary market on the blockchain network platform established by Cathay Securities.

According to Taiwan's STO regulations, subscribing investors must be professional investors, with a net worth exceeding 30 million NTD for individual investors or institutional investors.

About Sunshine Photovoltaic

Established in 2015, Sunshine Photovoltaic is Taiwan's first privately owned solar power seller, raising funds to build solar power plants, selling the generated electricity, and returning profits to investors to participate in long-term solar energy investments. Its goal is to enable everyone to easily participate in renewable energy.

As their business model is an investment model itself, the team attempts to utilize tokens for this model, issuing this STO using blockchain to record investor rights.

About Cathay Financial

Cathay Securities is Taiwan's first securities firm to handle STO business, establishing its own STO trading platform, which needs to cover issuance, negotiation trading, settlement, internal controls, risk controls, and channels to reach traditional investors. Given Cathay Financial's previous investments in the blockchain industry and the development of its own Digital Development Center, it has the capability to build an encrypted currency issuance and secondary market trading platform, and handle this STO.

Cathay Financial has invested in several blockchain industry projects in the past, including:

• Electric Vehicle Blockchain Finance Platform
• Global Trade Sharing Blockchain Platform
• Property Insurance Alliance Blockchain
• Decentralized Identity Authentication Planning - in progress

Therefore, its Digital Development Center team already has the ability to build a public chain, client-side construction, and related business capabilities, making it more capable of handling the Sunshine Green Benefit Debt-based STO business.

Current Status of STO in Taiwan

Compared to other countries, Taiwan has implemented STO regulations earlier, but due to strict rules, the Financial Supervisory Commission proposed a revised version in January last year. However, as of yesterday, no operators have applied.

STO Regulations in Taiwan

According to the Financial Supervisory Commission's regulations on the issuance of security-type tokens, Taiwan's STO regulations restrict three aspects:

• Issuer: For fundraising amounts of 30 million NTD or less, exemption from reporting to the competent authority is allowed; for fundraising amounts exceeding 30 million NTD, the operator should apply for a sandbox to experiment, and after successful testing, follow the regulations of the Securities Exchange Act.
• Investors: Open to qualified institutional investors and professional individuals with a net worth exceeding 30 million NTD, with professional individuals not allowed to hold more than 300,000 NTD in each STO case. After the amendment in January last year, overseas Chinese and foreigners can invest in STOs with fundraising amounts below 30 million NTD.
• Platform Operators: Platform operators need to apply for and obtain a securities dealer license, and provide negotiation trading for STOs. After the amendment in January last year, it was stipulated that each STO should have an interval of six months, with a single platform fundraising limit of 200 million NTD.

Challenges

As seen above, regulations for issuers and investors are very strict.

With 30 million NTD, it is not very attractive for capable OTC companies, and the preparation costs for new regulations and technology are not insignificant. For the Sunshine Green Benefit Debt-based STO, Sunshine Photovoltaic spent two years preparing, needing to execute many disclosure matters, and the cost-effectiveness may not be guaranteed.

Regarding investors, STO uses blockchain technology to allow investors to invest smaller amounts and reach a more diverse group of investors. However, the current regulations stifle the possibility of small investments, only serving institutions or professional investors, although the relaxation of restrictions last year allows overseas investors to participate.

Therefore, operators still hope that future regulations can be further relaxed, allowing blockchain technology to effectively improve the efficiency of current securities fundraising and achieve inclusive finance.

Promoting Cryptocurrency Regulation in Taiwan

Whether the Sunshine Photovoltaic STO this time is successful or not, it will advance Taiwan's cryptocurrency regulation and provide the government with the opportunity to obtain more realistic implementation data as a reference for future improvements, rather than remaining stagnant without progress.