Background

• TRESDAQ is the first and only initiative that creates affordable access to financing for small businesses;
• TRESDAQ is fully consistent with the government’s policy goals of developing the country’s middle class and thereby expands the economy;
• It could be a viable alternative to investors seeking short term fixed income returns with low to medium risk.

Overarching Innovation

• TRESDAQ is the first serious attempt to create value for small businessmen and entrepreneurs.
  • To date, neither the commercial banks, investment houses, or securities brokers have been able to create a sustainable financing mechanism for small businessmen;
  • Totally supportive of government policy. Any government should cater to the small businessmen because a wide middle class creates prosperity and stability;
• Innovation does not come without challenges

Innovation #1: Real Time Finance

– Best form of protection for financial investor;

• • Financial stress is always manifested first with commercial transactions;
  • Settlement delay rather than loss of principal will be the key risk that most investors will have to be exposed to
• – Use of proprietary IT platforms to gather real-time information on commercial activities at the transaction level

Innovation #2: Trade and Services Related Securities

– The trade document is itself the security to be sold down to the investor; these are contracts, are negotiable doucments, and have always been rediscounted on an OTC basis
– Trade is defined to be either goods or services
– Pioneered by DBP’s Marketplace for Small and Medium Enterprises (M4SMERP)

Innovation #3: TRES is safer for the investor

– Information on the quality of the security is direct and real time;
– Traditional fixed income securities, using new evaluation standards rely on

• • Dated information
  • Interpreted information
•