30 year paper technology still central to bond markets

The Portable Document Format (PDF) was created in the early 1990s by Adobe Systems, introduced at the Windows and OS|2 Conference in January 1993. This 30 years old technology remains central in a paper-based ecosystem of bond issuing, trading and settling. With cash piles burning rapidly for governments and corporations a more effective borrowing method is needed for this capital market instrument and a wider investor base to support corporate borrowing. 

COVID19 has increased needs for cash for business and government. Companies are short of cash. We want to replace the offline PDF-based approach to lending, trading, offering, register and cashflows management for borrowers and lenders. Chiefly reduce friction and pain for financial institutions and grow the number of participants that can join a borrowing. 

With companies and treasury departments rushing to issue bonds a technology that opens a similar digital method and also widens the pool of funders should be attractive. Bondsmart is trying to simplify and open wholesale borrowing markets and bond activity. 

The humble PDF started off on the dream of a paperless office, as the pet project of one of Adobe’s founders, John Warnock in a project called Camelot. Initially, it was an internal project at Adobe to create a file format so documents could be spread throughout the company and displayed on any computer using any operating system.

Nowadays the PDF is central to many operations of financial services. In Japan, for example, the clearance and settlement system appears to have limited interest in corporate bonds, because it was a decentralized, paper-based system. The United Kingdom’s paper-based system which has only recently been modernized. PDFs are the predominant model of paper-based
disclosure regimes that have underpinned the development of many European disclosure requirements (e.g. the provision of KIDs in PRIIPs and KIIDs in UCITS). 

Bondsmart are delivering an architecture to replace offline PDF based lending, trading, offering, register and cashflows for corporate borrowers and financial institutions when doing lending. Increase financial inclusion too with the admission of retail customers to be involved in lending too.

The need:
• Financial inclusion. Current market the preserve of the super wealthy
• Investors want to know the return on their investment
• Unique instrument that fits a financial need – income and security
• To fill a market gap
• Improve operation from a PDF and paper-based ecosystem to more electronic.

Current options for consumers:
• Options for an investor today:
o Need $200,000 to buy a single bond
o Mutual funds do not meet all the requirements of investors
o No control of bond, no known income level, no known maturity, etc

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