The rights of the Investors are set out in the Deed Poll and the Listing Rules. Whilst the economic and non-economic rights will depend on the nature of the product, a summary of the typical rights for equity and investment note tokens are as set out below:
Rights to distributions
Equity Tokens – The Investors shall be entitled to receive distributions that may be declared and distributed by the Issuer from time to time out of the profits of the Issuer. Investment Note Tokens - The Investors are entitled to the distribution/ coupon payment at a per annum on a fixed rate basis and payable on a semi-annual/annual basis or such other frequency to be determined prior to the issuance of the Tokens.
Voting Rights and Meetings
Equity Tokens (where underlying are ordinary shares) - The Investors shall be entitled to receive notice of, to attend, and to vote at any general meeting as that entitled by the members/shareholders holding ordinary shares of the Issuer and all such regulations in the Constitution relating to general meetings, a notice of and proceedings at such general meetings and votes of members shall apply accordingly to the Investors.
Equity Tokens (where underlying are preference shares)/Investment Note Tokens - Investors shall be entitled to receive notice of, to attend (in person or by proxy, or in the case of a corporation, by its duly appointed representative), and to vote at any meeting only where (a) the agenda contains any resolution that varies, abrogates, or otherwise alter the rights attached to the Tokens; or (b) where the Deed Poll provides for meeting for the Investors.
Amendments of rights attaching to the Tokens
No alteration, amendment, or addition to the rights attached to the Tokens may be made without the prior consent and approval of the Investors holding not less than seventy-five percent (75%) of the total number of Tokens issued.
Any such modification shall be binding on all Investors and shall be notified to them.
Repayment in the event of Winding-Up/Liquidation
In the event of winding up/liquidation, the Investors in all respects rank pari passu with other Investors of the same class
Trading, Transferability, and Transmission
Investors are entitled to trade the Tokens on an appropriate platform where the token is listed for trading. Apart from the trading of the Tokens on an appropriate platform, the Tokens may only be (a) transferred to family members of the Investors namely the spouse, parent, or child (including adopted child) who must be Participants on the KLDX Platform; or (b) transmitted to a person by operation of law who must be a Participant on the KLDX Platform and in case of the death of an Investor, the only persons recognized by the Issuer as having any title to the interest of the deceased is the legal personal representatives of the Investor.
Scheduled redemption for Investment Note: The Issuer shall on the date falling a specified number of months/years from the listing and admission of the Tokens on the KLDX Platform, redeem the Token at 100% of their nominal value. Tokens so redeemed shall be canceled forthwith and may not be reissued or resold thereafter and the obligations of the Issuer in respect of any such Tokens shall be discharged.
Early redemption: This will depend on the provisions set in the White Paper with respect to early redemption.
Rights to Proceeds
Equity Tokens – In the event of a trade sale, take over, etc, the Investors have the right to share in the proceeds of such sale, take over, etc in proportion to their holdings in the Tokens.
Option for Discounts, Products or Services
Option given to Investors by the Issuer to, for example, purchase properties owned by the Issuer, at the end of a specific period, at a discount or for services or products of the Issuer subject to the number of Tokens being held by the Investor.
Access to Information
Access to all material information relating to the Issuer announced on the KLDX Platform, the unaudited financial statements for the first half of the financial year and the unaudited financial statements for the full financial year, the semi-Annual Report and the Annual Report.
Complaints Handling or Dispute Resolutions and Procedures – the write-up is as follows:
Please see below a diagram setting out the process, procedures as well as escalation matrix for the management of complaints.
Contingency arrangements – The write-up is as follows:
In addition to the BCP and DRP, our contingency arrangements in the event of cessation of business due to insolvency are as follows:
- KLDX to notify SC immediately upon making a decision to cease its business;
- KLDX to appoint Receiver/ Manager;
- KLDX to halt all primary issuances and cancel/ freeze all trades on the KLDX Platform;
- KLDX to issue announcement on the status update of KLDX;
KLDX to notify Trustee and Digital Custodian/ Nominee (if any external party):
For Account Balances: KLDX to provide Trustee with the latest updated list of Tokenholders/Investors for a refund of funds back to Investors. All client monies will be accordingly refunded to them.
For Listed Tokens:
- KLDX to discuss with Issuer whether they would like to transfer the Tokens to another platform or to issue the certificates evidencing ownership e.g., share certificates to the Investors;
- Subject to the approval of the SC, KLDX will make arrangements with another platform for a transfer of the listed Tokens as per the decision by the issuer;
- Where the Tokens are to be transferred for listing on another platform, the necessary arrangements will be undertaken by KLDX. Investors will be notified and required to open an account with the other platform. All relevant data will also be transferred to the other platform;
- Where the Issuer decides not to transfer the listing to another platform or where the other platform chooses not to list a particular Token on its platform, arrangements will be made to issue documentation/certificate evidencing the underlying tokenized asset to the Investors.
- The Receiver and Manager will proceed with the liquidation of KLDX.