OIX PROSPECTUS

OIX PROSPECTUS

Open Investment ExchangeVersion 3 release date: 06/07/2018

Big Idea:Instant Secured Traceable Transactions

CONTENTSDISCLAIMER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Readers are notified as follows:• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

OUR BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Regulatory Exchange• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Series A and Series B Funding• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Bounty Platform• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Advisory Services• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

INDUSTRY TRENDS ARE IN OUR FAVOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Regulation is increasingly in focus• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8The investor is getting increasingly WEARY• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

OUR SOLUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Self-Regulation under a watch• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

INTRODUCING ISO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

WHAT IS AN IPO?• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9WHAT IS AN ICO?• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10WHAT IS AN ISO?• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Introduction• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10What is changing in Blockchain Tokens Offerings?• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Do you need to go the ISO way?• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11The Process of Listing on the Exchange• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12The Pre-Approval Period• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12The Approval Period• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13The ISO Period• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Post-ISO Scenarios• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Disclosures• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Periodic and Current Reporting • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Annual Report Declaration on Form O16-A .• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13The rating system is described below .• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Disclosure Controls and Procedures• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

ISO BEST PRACTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Secure and Resilient design• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Fraud Prevention: • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Privileged Access • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Monitoring• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18KYC and AML • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Pump and Dump• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Biometric Security• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

OUR GROWTH STRATEGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Increase adoption of ISO Standards• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18Focus on OPEN (OiX Professional Exchange network) • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Expand our ecosystem• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

DISCLOSURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Channels for Disclosure of Information• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Use of proceeds• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19Voting rights• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

RISK FACTORS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

OIX - SECURITY IN FOCUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Secure . Vigilant . Resilient .• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

NETWORK SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

ANTIFRAUD PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Manipulative and Deceptive Practices:• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

OX GOVERNMENT CLOUD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Executive Summary• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23The intended audience for this solution includes:• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Overview• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24OiX Government Features • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Cloud Services• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Data Management• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Network• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25OiX Government Security, Privacy and Compliance Overview• . . . . . . . . . . . . . . . . . . . . . . . . . . 26Security• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Infrastructure Protection• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Network Protection• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Data Protection• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Privacy• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Compliance• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27Blockchain Ready Cloud• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

OIX FEDRAMP PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Assess against all FedRAMP moderate control• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27Compliance • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

OIX FEDRAMP PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

OIX GOLD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

High Net Worth, Sophesticated and Institutional Buyers• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

OIX OPEN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

RISKMINIMIZER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

KEY FEATURES • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31Benefits for Promoters/Issuers• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31Benefits for investors• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

OIX COMPLIANCE PROGRAM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Laws / Regulations / Privacy:• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32Alignments / Frameworks:• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32Understanding Maker and Taker• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35Maker• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Taker• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

OIX ROADMAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

BASIC FACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

OiX ERC23 Token - • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

PUBLIC TOKEN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

ISO PHASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

FUND USAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

A SHORT HISTORY OF BLOCKCHAIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

BLOCKCHAIN APPLICATIONS AND SOLUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

MIDDLEWARE AND SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

INFRASTRUCTURE AND BASE PROTOCOLS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

BLOCKCHAIN POTENTIAL USAGE IN FINANCIAL SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Commercial banking• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40Payments• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40Risk management• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40Trade and supply chain finance• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40Capital markets• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41Regulatory compliance• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

CHARACTERISTICS OF COMMERCIAL TRANSACTIONS USING BLOCKCHAIN . . . . . . . . . . . . . . . 41

SOME FIS ALREADY LOOKING SERIOUSLY AT BLOCKCHAIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

R3 CEV• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42Depository Trust and Clearing Corporation (DTCC)• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42UBS• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42Barclays• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42Nasdaq• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

REGULATORS’ AND POLICYMAKERS’ ON BLOCKCHAIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

European Commission• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43International Monitory Fund (IMF)• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43Financial Conduct Authority (FCA)• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43BaFiN• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43Sweden Central Bank• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43New York department of Financial Services (NYDFS)• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43Swedish Authority• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43US Federal Reserve• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

WHY BLOCKCHAIN NEEDS TO BE REGULATED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

TOP BANK INITIAL USE CASES FOR BLOCKCHAIN - 2015 (IN %) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Regulatory Issues• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

EVOLUTION OF EXCHANGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

The Real Merchants of Venice• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46The First Stock Exchange — Sans the Stock• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46All Those East India Companies• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46A Little Stock With Your Coffee?• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46The South Seas Bubble Bursts• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46The New York Stock Exchange• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47The New Kid on the Block• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47The Future: World Parity?• . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47Performance • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48Interoperability • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48Standardization • . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

DISCLAIMERThis is a conceptual document (white paper) pro-

viding an outline for our proposed solution, OiX . This information may be amended or replaced at any time,

but we are under no obligation to update the white paper or provide the recipient with access to any ad-ditional information .

READERS ARE NOTIFIED AS FOLLOWS:Not available to all persons: OiX ERC20 tokens

are not available to all persons . Participating in our platform starting with the ICO is subject to comple-tion of a number of steps, including the need to clear KYC and satisfy whitelist requirements .

We make every attempt to comply with an-ti-money laundering, KYC, and Indian government regulations . We also have self-imposed regulations to ensure that we remain within the guidelines of gov-ernment mandates for traditional financial institu-tions .

No advice: This white paper does not claim to provide you with any financial advice . This is a state-ment of vision and does not suggest a reason why you should participate in the OiX platform or buy OiX ERC20 tokens . We strongly suggest you do a due dili-gence on the industry before investing .

No representations or warranties: No representa-tions or warranties are made as to the accuracy or completeness of the information, statements, opin-ions or other matters described in this document, or otherwise communicated in connection with the project . This is an evolving project that can be ful-

ly tracked only by following our activities on various platforms .

Nothing in this document is or should be relied upon as a promise or representation of the future . To the fullest extent permitted under applicable law, all liability for any loss or damage whatsoever—wheth-er foreseeable or not—arising from, or in connection with, any person acting on this white paper, or any as-pect of it, notwithstanding any negligence, default or lack of care, is disclaimed . To the extent liability may be restricted but not fully disclaimed; it is restricted to the maximum extent permitted by applicable law .

Personal responsibility: You must obtain all pro-fessional advice necessary to your situation, including that related to personal responsibility for tax and ac-counting matters . We hope that the OiX project will be highly successful and are working hard for its suc-cess . However, success is not guaranteed, and digital assets and platforms involve risk . You must assess these risks and your ability to bear them .

OiX is a natural and

robust market for

companies seeking to

raise growth capital

OiX AIMS TO BE A PLATFORM THAT TRANSFORMS MONOLITHIC TRADITIONAL EXCHANGE INFRASTRUC-TURE INTO A BLOCKCHAIN-BASED, NEW AGE PLATFORM

This summary highlights se-lected information that is present-ed in greater detail elsewhere in this prospectus . This summary does not contain all of the infor-mation you should consider before investing in our Class A common stock . You should read this entire

prospectus carefully, including the sections titled

“Risk Factors” and “Competition Analysis” and the re-lated notes included elsewhere in this prospectus, be-fore making an investment decision .

Unless the context otherwise requires, the terms “OiX,” “the Company,” “we,” “us,” and “our” in this pro-spectus refer to OiX Exchange and the term 'token' refers to our Securities Token that is being disbursed through our Initial Securities Offering .

OUR BUSINESSREGULATORY EXCHANGE

Our modern fundraising for businesses run on a slew of regulations that are imposed by regulatory bodies like SEC in the US, ASIC in Australia, Prudential Regulation Authority in UK and so on . The investors are fairly protected and IPO scams are few and far be-tween .

While this is an ideal situation for the investors, over time, it has become extremely restrictive and the only way left for a small business to grow has been through bank loans and not through public funding . This is a reality that the businesses are living with .

The advent of Blockchain based ICOs helped the businesses get public funding without the hassle of much regulations . While this has been a boon for the companies, it has little or no protection for the inves-tors . It is this aspect of the ICOs that have been target-ed by most of the regulatory authorities .

Our business plan can be summed up with one simple equation - ISO = ICO + Regulations . While we understand that in the lack of a regulatory body in the blockchain space, we will have little effective con-trol over anyone that wants to launch an ICO but we

are determined to work with like minded Blockchain businesses who want to self-regulate and be ready for the era of regulations that is about to set in .

Some of the regulatory aspects like reporting are still grey areas . There is no central body to audit the financial reports, however, to maintain a third party audit, for the years before the regulations set in, will take away a lot of headache when SEC or another reg-ulatory body wants to look at financials from the year of incorporation .

The existing exchanges have little to no interest in the regulations and that is why so many of them are getting closed down by authorities . This is a matter of major concern for the investors and for issuers alike . Today, our exchange is well positioned to re-imagine the way work gets done . We’re focused on regulations and we are focused on a blockchain exchange that makes the tokens future ready .

We believe the need for our platform will continue to grow as more countries roll out regulations and the pool of unregulated investors starts growing smaller .

SERIES A AND SERIES B FUNDINGWe are the first exchange to have a plan to facil-

itate a Series A and Series B funding option with the help of our pool of private equity investors and ven-ture capitalists . We believe that this will be a require-

ment for entrepreneurs with great idea because to the product ready for ISO and to spend on legal ad-vise to make them compliant .

BOUNTY PLATFORMWe will also be coming up with a bounty platform

where the ISOs can list their bounty program and will have a tracking system in built to facilitate a better re-porting and validation system .

SUMMARY

07OiX Whitepaper V2.0

ADVISORY SERVICESWith our empanelled legal and stock broking

companies, there will be an ecosystem generat-ed where the companies looking to come up with ISOs can get ISO/IPO advisory service and be more compliant . This also means, when we come to the stage where we have direct regulations on Block-

chain tokens, we will have a team that will guide our listed token home .

By solving these universal problems, we plan on becoming invaluable to our users . The popularity of our platform will be driven by our focus on the future health of the business and the investment .

INDUSTRY TRENDS ARE IN OUR FAVOR

REGULATION IS INCREASINGLY IN FOCUSAs the industry is realizing the inevitability of reg-

ulations and as exchanges keep falling like dominoes, our vision is one that will sustain the industry in the long run . Many start-up exchanges are talking regula-tions but are stopping short of any real action fearing the loss of business of those tokens that will refuse to

self-regulate . We are not just talking the talk but also walking

the walk . We are making sure that any and every to-ken listed on our platform is compliant and can pass the muster when IPO standards are applied to them .

THE INVESTOR IS GETTING INCREASINGLY WEARYAs more and more exchanges give liquidation no-

tice and as more and more business models become increasingly complex, there is a clear and present need for the token to be audited before it is allowed to be listed . In traditional IPO setting, this due diligence

is done by the regulator and in the lack of a regulator in the blockchain ecosystem, it is the duty of the ex-change to make all efforts to do the due diligence .

08 OiX Whitepaper V2.0

OUR SOLUTIONSELF-REGULATION UNDER A WATCH

We believe that an exchange like ours where reg-ulations are in focus is a key to the future . With a very strong KYC/AML policy in the background, the entry to the exchange is very tough . While the companies have to structure their tokens as per the guidelines of a secu-rities token, the investors have to go through an exten-sive KYC/AML procedure .

This is not a standard practice in blockchain eco-system and listings are done after taking an upfront fee - something we are not practicing on OiX . While it may turn off many issuers and they might choose not to be listed on OiX, we believe that those with a long term plan will be pleasantly surprised looking at the way we are helping them get future ready .

The one issue that we are actively looking at for more clarity is the way financial filings will be done . While we would ideally like something similar to the 10Q and 10K filings under US SEC guidelines, we still have to come up a mechanism for doing it . We are advising our issuers to maintain an Investor Relations page for all pertinent information and for quarterly and annual financial disclosures but we realize that going for a standardized format like EDGAR or XBRL will be a tall order in the short term .

This issue is going to persist even after the regula-tions set in, considering the cross-border nature of an ISO/ICO .

INTRODUCING ISO

The idea behind ISO is a fairly simple one – accept the reality . The reality is that sooner than later the regulatory authorities across the globe are going to start regulating Blockchain tokens . The reality is that we will most prob-ably be judged by the Howie Test and the reality is that most of us are coming up with securities tokens . In order to get listed on OiX platform a token will have to go the distance and become compliant securities just like in the real world .

WHAT IS AN IPO?An initial public offering (IPO) is a financial event

where a company first sells shares of stock to the gen-eral public . This typically happens concurrently with listing on a major stock exchange like the New York


Stock Exchange (NYSE) or NASDAQ . When the com-pany “goes public,” anyone can buy and sell shares

quickly and easily through a stockbroker .

WHAT IS AN ICO?ICOs work similarly, but without the regulatory

oversight and market listing that stock IPOs require . Instead, ICOs generally go directly to the public, without any stock broker or intermediary, via online

transactions . While this eliminates a lot of problems, it also introduces an element of uncertainty and the potential for fraud that can threaten the entities do-ing the ICO .

WHAT IS AN ISO? ISO is the Blockchain empowered equivalent of

IPO . It has more stringent requirements than ICO but not quite as much as IPO . In the lack of a regulatory body the ISO goes as far as it is possible in an unreg-ulated market to make sure that the companies offer

as much information to the public as possible . ISO is there to ensure that investors are able to take more informed decision and the companies are able to get easy acceptance by regulators when regulations set in .

INTRODUCTIONFor most startups it is a big issue to come up with

more capital . IPOs are extremely restrictive and costly and getting a bank loan based on an innovative idea is akin climbing the Everest .

ICOs have come under heavy scrutiny and the constantly popping news of ICO frauds have brought a cloud of doubt over the long term viability of the ICO process .

Governments across the world are formulating regulations for Blockchain tokens but the very nature of ICO, as it currently stands is erroneous . It encour-ages anonymity and opacity . IPO has certain features like independent audit, financial reporting and due diligence that are absent in an ICO . This is why we have proposed the new standard for going public via a blockchain token offering – Initial Securities Offering .

The first premise of ISO is that it considers all tokens to be securities tokens . At this time the ISO standard does not support utilities token in any shape or form . The second premise of ISO is Transparency . Just like in the IPO process, ISO insists on standard disclosure .

Our focus is both on the promoter and the inves-tor . We would like the promoter to rest easy knowing that there is life beyond regulations . Likely, when the regulations do set in, the regulators would like to re-view all the procedures that were followed while tak-ing the company public via a blockchain token sale .

If a company take the ISO route instead of ICO, and follows all the set norms, the chances of them passing all the checkpoints put up by regulations will be very high .

For instance, if a promoter maintains the record of all the investors (something we do with KYC on our platform for the promoters), they can give a detailed shareholder list to the regulators . Our disclosure pol-icy also means that quarterly, half-yearly and annual ‘filings’ have been maintained . This might significant-ly reduce the fine that might be levied on promoters under upcoming regulations .

For investors, the biggest challenge is to ascertain if the ICO is legit . In the case of an IPO there are mul-tiple checks that the promoters have to go through before their securities get listed . ICOs, however, are a different story altogether . Most ICOs are built around a few keywords and a whitepaper . There is no actual analysis done by an independent party about the pro-ject viability and there is little by the way of actual KYC being done on the team that is promoting the Public issue .

ISO addresses this weakness of ICOs . In order to get listed on OiX Platform, the promoters have to sub-mit a business plan to the Exchange for viability study . They also have to go through an extensive KYC so that the investors know exactly who is it that they are back-ing . We hope this new standard for Blockchain token keeps growing in its adoption and adaptation .

WHAT IS CHANGING IN BLOCKCHAIN TOKENS OFFERINGS?As the Blockchain token market looks promis-

ing, companies need to be fully prepared to take the upcoming regulatory phase head on . This cannot be done by procrastinating or by persisting with unreg-ulated ICOs . While an ICO may be your favoured ap-proach to raising capital at this given time, it is impor-tant to evaluate all possible implications that could act as roadblocks in continuing business once the regula-tions set in .

A multi-track approach will allow you to keep your options open during the preparation process . Do you see yourself as a utility token? Can you pass the ‘How-ie test’? If yes, then you can easily go the ICO way and get away with it . However, if you cannot pass a Howie test then it is time to drop the idea of going via an ICO and walk the path to an ISO .

Be under no doubt; when you go for an ICO or an ISO, you are essentially going public . This journey of


transformation into a public company does not start or end with your ICO or ISO . Your success increasingly depends on your approach to regulation, your team and its skill and pedigree and a great deal on a coor-dinated team effort . Foreseeing regulatory uncertain-ty, it is more important than ever to over self-regulate rather than to be ambiguous on this issue . Begin to assemble your advisory team well in advance of your public launch .

Although the future is uncertain, the actions of various governments (barring a few) seem to be taken out of fear and loath rather than a deep understand-ing of the Blockchain . This means that as usual, the government will being in regulations rather swiftly and fine the unprepared to death . At this point it is

wise to remember the words of Ronald ReaganISO is not dependent on the kind of blockchain

that you are using . While the first exchange to pro-pose it is on ERC-223 standard it also has variant that is deployed by another exchange that is on EOS stand-ard . With the advent of more standards and with the elimination of some inherent drawbacks of the distrib-uted ledger technology, there is a great chance that we will find a much wider application of blockchain technology in days to come .

“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it . If it keeps moving, regulate it . And if it stops moving, subsidize it .”

DO YOU NEED TO GO THE ISO WAY?Key questions to consider while evaluating start-

ing the process of going public via an ISO: ■ How is the business idea developing? Is it ready for

the ISO? ■ Do you have the corporate structure ready to fully

utilize the ISO Funds? ■ Have you structured your core ISO team? ■ Do you have a clear timeline in place? ■ Is there an internal and external communication

plan?

Evaluate Plan

■ Develop a robust business plan including the ob-jectives of going public, as well as a Plan B

■ Establish an internal team that will manage the IPO process

■ Appoint external advisors including financial, ac-counting and legal advisory teams

■ Adopt leading-practice corporate governance and reporting processes

■ Complete strategic initiatives and pre-IPO transac-tions (e .g ., acquisitions)

■ Begin preparation of historical financial informa-tion

■ Establish financial reporting procedures ■ Review management information systems and

operational and compliance controls ■ Consider ownership, tax issues and nationality of

holding company •

■ Finalize preparation of historical financial informa-tion

■ Commence initial due diligence ■ Make necessary changes to the executive board

and begin recruiting additional board members ■ Start building financial model and business

plan ■ Meet with stock exchange representatives ■ Consider investor relations strategy and equity

story ■ Implement financial reporting procedures ■ Discuss transaction with the relevant stock ex-

change ■ Agree draft timetable


Execute Deliver

■ Finalize timetable ■ Begin financial and legal due diligence ■ Consider adequacy of working capital ■ Produce draft prospectus and other documents ■ Do initial review of pricing issues and public rela-

tions presentations ■ Begin initial marketing ■ Commission expert reports if required ■ Appoint non-executive directors ■ Eliminate deal breakers and resolve any potential

litigation or due diligence issues ■ Comply with all reporting requirements ■ Prepare road show presentations to targeted po-

tential investors

■ Begin formal marketing ■ Price and allocate the offering ■ Register prospectus ■ Have underwriter perform marketing of securities

(“book building”) ■ Admission to stock exchange is granted and trad-

ing commences

THE PROCESS OF LISTING ON THE EXCHANGE

The ISO process starts with the registration of the company’s intent with OiX . The registration pro-cess involves three stages: (1) the “pre-approval peri-od”—the period where all the documents and infor-mation regarding the ISO has to be submitted to the

exchange; (2) the “approval period”—the period where the exchange does its due diligence and asks for more information, clarity and takes a decision on whether the company can go public via an ISO; and (3) the “ISO period”—the period in which the token can actually be sold to the public .

THE PRE-APPROVAL PERIODThe pre-approval period is the most critical time

in the ISO Process . This is the time when the promot-ers undertake the following activities

1 . Putting together a team of advisors and core team members to take the ISO process to its logical end .

2 . Get all the paper ready for initial public disclo-sure . This would include but not be limited to a red

herring prospectus, a team profile and organizational structure statement . Generally the exchange would provide you with a standard due diligence request list .

3 . Create a formal, comprehensive business plan and a detailed timeline regarding the operational, financial and strategic initiatives necessary for the company to go public .


THE APPROVAL PERIODThe approval period is the one where we have the

exchange evaluating and confirming the information provided by the promoters .

■ During this period the exchange issues what can be generally be termed a due diligence request list . These may have questions based on informa-

tion provided or request for new information and disclosures .

■ During the approval period, the company and the promoters also kick off their marketing efforts, both online and offline, for the offering .

THE ISO PERIODDuring the ISO period, there can be three distinct

phases – Private Sales, Pre-ISO and ISO Sales . These can run from any duration but not exceed 364 days for the whole process .

POST-ISO SCENARIOS1 . In case the minimum required capital or softcap is not

met, the money will be returned to the investors 2 . In case the minimum required capital or softcap is met,

the money is released to the promoters and the pro-

cess is completed . 3 . In case the collection exceeds maximum approved

capital or hardcap, the company will have the option of keeping 10% in excess of the hardcap

DISCLOSURES1 . ISO at its basic is built on the foundation of full and fair

disclosure of all material information . The big idea be-hind ISO is to enabling an investor to make an informed decision whether to invest in a company, or not .

PERIODIC AND CURRENT REPORTING 1 . Just as a public company files annual, quarter-

ly and current reports with the regulators, any company going ISO has the obligation to main-tain and display their financial reports and regu-lar news updates and supplement information on

their website . Additionally they have to submit an undertaking to the exchange every three months that they are maintaining their books and doing due diligence and maintaining KYC in case their token have been listed on other exchanges too .

ANNUAL REPORT DECLARATION ON FORM O16-A.1 . A company listed on an ISO compliant exchange

must submit a declaration that they have made their annual financial report public . In the case they also submit the financial report along with the declaration they will be given an A rating and they will be eligible for all the features of an ISO Exchange (for example OiX Gold on Oix .global and also 2nd Round of Funding) . In case of such

a deceleration the company will be given a B rat-ing and while they can trade on the ISO exchange, they will not be able to avail advanced features . In the case the company fails to submit even a dec-laration, the trading will be halted and the trading will only resume when declaration has been sub-mitted along with a monitory fine .

THE RATING SYSTEM IS DESCRIBED BELOW.

Rating Requirement Eligibility

A Submission of financial report along with declaration

OiX Gold as well as Second round of Funding

B Submission of just declaration Not eligible for OiX Gold or Second round of Funding

C No Submission Not eligible for trading

DISCLOSURE CONTROLS AND PROCEDURESISO standard will be keeping the guideline as outlined in Rule 13a-15 of The Securities Exchange Act of 1934 .

Although lacking the legal mandate to enforce the guidelines ISO was built to pass the muster of regulators . The one thing that the regulators will look for when they come knocking will be the financial documents and other procedural documents . By following the mandate as given in the Rule 13a-15 of the Exchange Act, the chances that the company is fast tracked into legality with minimum fines . ISO standard strongly recommends that a lawyer be hired by the company to lead their disclosure practices .


ISO BEST PRACTICES

1 . It is advised that one should not wait until the last minute to establish a practice of regularly releasing information . Maintaining a blog for the company that is contemplating an ISO gives a company more organic exposure . Your blog must establish a regular pattern and manner of releasing important business information – including but not limited to corporate developments or product updates . If you start this exercise too close to the ISO, it will be difficult to establish that you have regularly released the information and consequently will cast doubt on whether dissemination of the information is during the IPO process .

2 . You must have duties well defined during the whole ISO Process . There should be a team ready with all the answers for the investors, exchange and regulators (when they arrive on the scene) . Preparation and coach-ing both for non-deal and deal roadshows, mock presentations and investor meetings require communication specialists and public relations resources .

3 . Have One-Pages, Prospectus and Presentations on various aspects of your business uploaded on your ISO Website . It is advised to memorialize the website and leave it as it is and not take it down after the ISO pro-cess is over . Many investors get jittery if ISO websites go down .

The following principles help inform and protect buyers, and increase the chances of a successful token sale, especially for a sale which occurs before there is a live network using the token . They are guidelines and are not designed for any specific situation . Please consult your legal and other advisors . Most of these best practices do not directly affect whether a token is a security under the Howey Test

Principle 1: Publish a detailed white paper

How? ■ Describe the protocol and the network ■ Identify a clear and compelling reason for the token to exist ■ Provide a detailed technical description of the proposed implementation ■ Set clear expectations for total token supply and distribution ■ Have an independent expert review the white paper

Why? A white paper defines the network and its use cases . It is critical for buyers to be able to understand the characteristics and functionality of the token they are buying, the challenges and risks of development, and the benefits of using the network .


Principle 2: For a presale, commit to a development roadmap

How? ■ Provide a detailed development roadmap ■ Include estimates of time and costs for each stage of the project ■ Include a breakdown of estimated expenses by category ■ Allocate funding for each stage of development and consider restricting

access to funding until milestones are achieved ■ List the names of key members of the development team and advisors ■ Be transparent about remuneration paid to key members of the devel-

opment team and advisors ■ Quantify early contributions of members of the development team and

advisors ■ Between sale and launch of the network, report back to token holders

periodically on progress against the development roadmap ■ Set aside funds for independent security audits and a bug bounty pro-

gram

Why? A clear development roadmap gives buyers confidence that the proceeds of the sale will be properly used for the project and that the network will be launched, meaning that they will be able to use the tokens as intended .Setting aside funding for each stage of the project helps establish structure and allows buyers to assess the likelihood of success . Using blockchain fea-tures to restrict the development team’s access to funding can deliver more transparency .Members of the development team and advisors should be paid full and fair value for their services, through a combination of money and tokens . Quan-tifying the value of contributions, especially early contributions (pre-crowd-sale) provides transparency .Identifying the development team and advisors helps potential buyers as-sess the credibility of the project and its potential for success . It reduces the likelihood of fraud .Note: Many aspects of Principle 2 only apply to token sales which occur be-fore there is a live network using the token

Principle 3: Use an open, public blockchain and publish all code

How? ■ Use an open and transparent blockchain ■ Use open source software ■ Where possible, commit to using standard or well-known token con-

tracts (e .g . ERC20) ■ Do not use a private or unintelligible blockchain, or one for which the

developer is the sole or primary transaction validator ■ Commit to undertake an independent security audit before launch

Why? Building with open source software and using an open, public blockchain provides transparency, enables real participation from token holders and in-dependent developers, allows for auditing, and helps prevents fraud .Enabling real and meaningful participation in the network from a diverse set of independent parties may also strengthen the arguments against the sec-ond and third criteria of the Howey test, because participants are less reliant on the initial developers .


Principle 4: Use clear, logical and fair pricing in the token sale

How? ■ Set a maximum number of tokens to be sold in the crowdsale ■ Use a pricing mechanism which does not increase over time . Consider a

Dutch Auction or similar mechanism to price tokens fairly ■ Set a cap for the amount to be raised ■ Set a minimum amount and refund buyers if the minimum amount is

not met ■ Denominate the price in one currency (e .g . ETH or BTC)

Why? The total proceeds from a crowdsale should not exceed the estimated costs of development . A crowdsale should be capped at the number and price of tokens required to raise this amount .Pricing mechanisms which increase over time can encourage irrational be-havior (e .g . FOMO) and do not treat buyers equally . Setting the price in a single currency reduces the potential for confusion and arbitrage .

Principle 5: Determine the percentage of tokens set aside for the development team

How? Decide on the percentage of the total token supply that represents a fair re-ward for the work of the development team and advisors .Release those tokens to the development team incrementally over time (contingent on their continued work on the project) .

Why? Concentrating too many tokens in the hands of the development team and other contributors increases the risk of centralization of control of the net-work . On the other hand, setting aside too few tokens does not align the interests of the development team with the interests of other token holders .Releasing tokens to the development team over time aligns their interests with other users over a longer period .Releasing tokens to the development team over time also reduces the risk of affecting the market - it prevents large numbers of tokens from flooding the market at one time .

Principle 6: Avoid marketing the token as an investment

How? ■ Do not promote the token as an investment that will increase in value ■ Promote the token based on its functionality and the use case for the

network ■ Avoid analogies with existing investment language and processes - e .g .

‘ICO’ ■ Provide appropriate disclaimers about the token as a product, not as an

investment .

Why? Marketing a token as a speculative investment, or drawing comparisons to existing investment processes, may mislead or confuse potential buyers . It may also increase the likelihood that the token is a security .Using a short, relevant disclaimer which accurately describes the risks of the tokens, protocols and network is useful . Long, legalistic disclaimers about the risks of investment are not helpful to buyers and may provide the im-pression that the token is an investment


WHAT SETS US APART

Since the beginning, we’ve focused on making the most of our expertise in compliance and in all matters securities . What really sets us apart is the will-

ingness to forego a large chunk of business, that is re-luctant to go compliant, to cater to a select few who are eager to build a sustainable business .

SECURE AND RESILIENT DESIGNOur platform is based on ERC-23 and is the most

secure implementation of Ethereum blockchain to date . OiX deploys the Federal Information Process-ing Standard to protect the data at rest and all the transfer of data is encrypted . The Access to data is control by Access Control System and separation

of duty principals . Access to privileged data is con-trolled using 2 factor authentication system and fol-lows the federal standard of security control such as FedRAMP, NIST and makes reasonable effort to con-form with compliance .

FRAUD PREVENTION: OiX employs segregation of duties policies to protect organization from unauthorized access to account and

the data .OiX SoD policy engine has several components:

■ Define sets of two or more entitlements that should not be held by a single user . ■ Access certification is used to periodically renew approved SoD exceptions .

Least privilege: OiX platform implements least privilege access system . This ensures everyone uses a stand-ard user account, even system administrators and managers . This minimize the threat since a standard user can’t install programs or modify system settings .

None of the Administrators have access to data or can take control of infrastructure . Access to data, and man-agement dashboard is controlled by combination of 2FA software and hardware tokens .

The OiX platform enables users to include multiple stake holders and more than one hardware and software tokens for successful access to account, data and infrastructure .

PRIVILEGED ACCESS The platform by design does not grant admin

rights to any user . The privilege access requires mul-tiple stakeholders to log into system . The deny all rule ensures, the data is protected by unauthorized access .

We supervise the transactions to the point that an au-tomatic trigger is pulled whenever there is a large/un-usual transaction .


MONITORINGTransactions are monitored using patented pro-

prietary algorithms and automatic rules and flags are applied to protect investors from unusual and mali-cious transactions .

KYC AND AML With KYC and AML policies strictly in place at the

time of on-boarding of both tokens and investors, a trust environment exists . Our AML Policy is designed to prevent money laundering by meeting the AML

legislation obligations including the need to have ad-equate systems and controls in place to mitigate the risk of the firm being used to facilitate financial crime .

PUMP AND DUMPWe have strong policies against pump and dump .

OiX proprietary Exchange Circuit Breaker algorithm works much like the Securities Stock exchanges . If any token sees unusual activity and the price of a to-ken rises more than 7% in one minute, the algorithm

halt trading of that stock for 30 minutes and the cycle repeats till such time as pump and dump attacks go away .

This helps keep the platform compliant with the stock market regulations in various countries .

BIOMETRIC SECURITYOiX also developing biometric safeguards for your

online investment accounts, especially for access to these accounts through mobile devices . Biometric safeguards for an investment account may include

fingerprint, or iris scanning . These safeguards may be used with or instead of a password to access your in-vestment accounts .

OUR GROWTH STRATEGY

INCREASE ADOPTION OF ISO STANDARDSWe have designed the ISO structure to withstand

the changes brought about by the regulations as they set in . While not everyone will jump on to the band-wagon but we believe that we will be able to cash in on the advantage we have of being the first . We be-lieve that we will be able to double our issuer count in the third and the fourth quarter and we will follow up with similar growth in the second and the third year

too . ISO standard will also find favor among the in-

vestors and our belief is that this will be the biggest influencer . With strict measures on weeding out the 'non-compliant' issuers, the investors will be better protected and therefore more confident while invest-ing on our platform .


FOCUS ON OPEN (OIX PROFESSIONAL EXCHANGE NETWORK) A large part of our growth strategy is a symbiotic

one . We are planning to grow as our network grows . The first layer of this network has the issuers and in-vestors, just like any other exchange . Our second layer is unique to our platform and consists of professionals such as Investment Bankers, Stock Brokers, Invest-ment Advisors, Legal Experts, Filing Agents and Influ-

encers . Through our OPEN initiative we are creating a

platform within the framework of the exchange that will facilitate the issuers by getting them connected with the right professionals for the job . We encourage people to at least engage professionals

EXPAND OUR ECOSYSTEMNot just OPEN, our thriving ecosystem also comes

from our focus on ease of doing transactions and our deep understanding of what the issuers or the inves-tors might need . We would like to lead the crypto cur-rency exchange system with information, technology

and expertise . We will be providing our issuers with the option to

host their Investor Relations page with our IR Room Service . This is the first of its kind initiative in the blockchain token ecosystem .

DISCLOSURES

CHANNELS FOR DISCLOSURE OF INFORMATIONInvestors, the media, and others should note

that, following the completion of this offering, we in-tend to announce material information to the public through our investor relations page and also through our telegraph channel and Medium blog, depending upon the nature if information that we are sharing at the given time .

The information disclosed by the aforemen-

tioned channels should be deemed to be material information . As such, we encourage investors, the media, and others to follow the channels listed above and to review the information disclosed through such channels .

Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website .

USE OF PROCEEDSWe estimate that the net proceeds to us from the

sale of our Securities tokens will be approximately $ 32M . The principal purposes of this offering are to in-crease our capitalization and financial ability to deliver growth . We intend to use a portion of the net proceeds

to develop our platform and our offerings further . We would like to spend more on getting licences from dif-ferent regulators so that we can enter various markets in completely compliant manner . We are already in talks with various regulators to get exchange licences


in various countries . We will also be using the funds to gain attention

of the market and to educate them . A large part of the proceeds are earmarked for Marketing and pro-

motions . We will also be spending a smaller portion of the proceeds to build our team across the border and to get key skills in place in various jurisdictions and markets to run our business with a long term vision .

VOTING RIGHTSConsidering the highly technical and focused

work on which there are multiple regulations, voting rights, at this time, are only open to the board of direc-tors and not to all shareholders .

RISK FACTORS SUMMARY

Our business is subject to numerous risks and uncertainties, including but not limited to those highlighted in this section:

■ Our business depends on our ability to attract and retain issuers and users, any change in the market senti-ment may adversely affect our future results of operations .

■ Our business could be damaged, and we could be subject to liability if there is any unauthorized access to our data or our users’ content, including through privacy and data security breaches .

■ Our business could be harmed by any significant disruption of service on our platform or loss of content . ■ We operate in a highly competitive industry where many of our competitors have greater financial, techni-

cal, marketing and other resources . ■ We may not be able to respond to rapid technological changes, extend our platform, or develop new fea-

tures . ■ We may not successfully manage our growth or plan for future growth . ■ We operate in an industry that is in nascent stages of development and as yet unregulated . Any major reg-

ulation can make our platform unable to operate in some jurisdiction, adversely affect our future results of operations .


OiX - SECURITY IN FOCUS

SECURE. VIGILANT. RESILIENT.OiX has standardized approach to security as-

sessment, authorization, and continuous monitoring for cloud products and services .

OiX Hyperledger supports private (permissioned) Blockchain through its identity management service which authenticates all participants in the network .

OiX adopts NIST Security standards FIPS compli-ant cryptography module to prove the authenticity and integrity of the digital assets .

The OiX security authorization using the Fed-RAMP requirements which are FISMA compliant and based on the NIST 800-53 rev3, (800-53, 8003-47) and FIPS 199 and 200

■ Improves real-time security visibility ■ Increase confidence in security of OiX platform ■ Provides a uniform approach to risk-based man-

agement ■ Ensure consistent application of existing security

practices ■ Increase automation and near real-time data for

continuous monitoring

■ Accelerate the adoption of secure OiX platform through reuse of assessments and authorizations

■ Improves the trustworthiness, reliability, consist-ency, and quality of the Federal security author-ization process

■ Achieve consistent security authorizations using a baseline set of agreed upon standards to be used for OiX product approval in or outside of Fe-dRAMP

■ Prevent anyone — even root users and adminis-trators — from accessing sensitive information

■ Deny illicit attempts to change data or applica-tions within the network .

■ Carefully guard encryption keys using the high-est-grade security standards so they can never be misappropriated .

Secure Vigilant ResilientBeing secure means having

risk-prioritized controls to defend against known and emerging threats

Being vigilant means having threat intelligence and situational awareness to identify harmful be-havior .

Being resilient means having the ability to recover from, and minimize the impact of, cyber inci-dents .


NETWORK SECURITY

OiX network security capabilities increase privacy and control network access . These include: ■ VPN and firewalls create private networks, and control network access ■ Data in transit uses TLS Encryption across all services

OiX leverages auto-scaling DDoS mitigation tech-nologies .

Data integrity services address the unauthorized or accidental modification of data . This includes data insertion, deletion, and modification . To ensure data integrity, a system must be able to detect unauthor-ized data modification . The goal is for the receiver of the data to verify that the data has not been altered . Confidentiality services restrict access to the content of sensitive data to only those individuals who are au-thorized to view the data .

Confidentiality measures prevent the unau-thorized disclosure of information to unauthorized in-dividuals or processes .

Identification and authentication services es-tablish the validity of a transmission, message, and its originator . The goal is for the receiver of the data to determine its origin .

Non-repudiation services prevent an individual

from denying that previous actions had been per-formed . The goal is to ensure that the recipient of the data is assured of the sender’s identity .

Know the OiX Shared Responsibility Model OiX provides a secure global infrastructure and

services . OiX shared responsibility model, which re-quires OiX and customers to work together towards security objectives . OiX provides secure infrastructure and services, while you, the customer, are responsible for secure operating systems, platforms, and data . OiX provides services and features you can use to enhance security . To ensure secure services, OiX provides tech-nologies you can implement to protect data at rest and in transit .

OiX Advisories and Bulletins . OiX provides advisories around current vulnerabil-

ities and threats and enables customers to work with OiX security resources to address concerns like report-ing abuse, vulnerabilities, and penetration testing .

ANTIFRAUD PROVISIONSMANIPULATIVE AND DECEPTIVE PRACTICES:

It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of inter-state commerce, or of the mails or of any facility of Open Investment exchange,

b) To employ any device, scheme, or artifice to defraud,


c) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or

d) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security ."

To use or employ, in connection with the purchase or sale of any security registered on a Open Investment Exchange or any security not so registered, or any securities-based swap agreement (as defined in section 206B of the Gramm–Leach–Bliley Act), any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors .

OiX GOVERNMENT CLOUDAt OiX, we view digital transformation strategy as

the core driver in improvements to productivity, effi-ciency, and collaboration within government agen-cies .

Open Investment Exchange, caters to disparate government agencies needs and understand that the process for developing a successful blockchain strat-egy is not "one-size-fits-all" . Rather, it involves a mesh of technology solutions which are highly dependent on individual agency's present goals, active responsi-bilities, and roadmap vision . For agencies dealing with public records, mission-critical files, or otherwise vul-nerable data – OiX blockchain solution pursues com-pliance and security standards such as FedRAMP .

OiX Government cloud platform design, sub-structures the needs of government agencies such as federal reserve bank currency exchange . Collectively, United States Payment, Clearing, and Settlement pro-cesses about 600 million transactions valued over 12 trillion .

OiX distributed ledger technology transforms payment, clearing and settlement processes, includ-ing how funds are transferred and how securities, commodities, and derivatives are cleared and settled . Blockchain Solutions in OiX Government provide the means for government agencies to improve their se-curity practices, increase transparency, and better ad-here to regulatory compliance .

Blockchain solutions in OiX Government cloud provides a means for proving the integrity of public data held in registries, enabling a more secure pub-lic infrastructure where citizens and agencies may be fully certain of both the integrity and authenticity for public data records .

OiX Blockchain network is secured by using im-plicit encryption mechanism as well as the consensus mechanism . Mainly, there are 2 consensus process-es – Proof-of-Work and Proof-of-Stake . Government agencies can provision a fully-configured blockchain instance, using OiX Government services to configure a globally redundant blockchain topology .

EXECUTIVE SUMMARY As eGovernance is making inroads across the

globe, the need for cloud computing is taking center stage and many government bodies are looking for effective ways to engage stakeholders and to achieve better cross-agency collaboration . This, in turn means that there is a greater need for better alignment of re-sources and efforts in terms of more robust decision making ability viz-a-viz IT readiness, minimize invest-

ments in datacenter while maximizing the existing investments by adopting a Cloud/Hybrid-Cloud ap-proach . All this has to be done while maintaining and improving upon measures of security, privacy and compliance .

OiX Government is the blockchain-ready Cloud solution for government agencies that helps govern-ment agencies meet these challenges .

THE INTENDED AUDIENCE FOR THIS SOLUTION INCLUDES: ■ Government agencies interested in Enterprise Cloud Services ■ IT companies with SaaS Solution aimed for Governments .

OiX Government is a robust government cloud offering that supports government agencies in sce-narios that warrant swiftness, scale, safekeeping and compliance . Our team has extensive experience work-ing on this technology and together with our keen in-sight into the working of the upcoming ecosystem of Blockchain, our solution is the one for years to come .

In order to make it compliant with the wide array

of security standards, as laid down by major regulato-ry authorities, we have made an extensive study of the guidelines and ensured that we follow the standards . Regulations such as United States Federal Risk and Authorization Management Program (FedRAMP), Department of Defense Enterprise Cloud Service Broker (ECSB), Criminal Justice Information Services (CJIS) Security Policy and Health Insurance Portabil-


ity and Accountability Act (HIPAA) are rigorously fol-lowed apart from a number of other standards as list-ed in Appendix 1 .

OiX Government offers the core components of Infrastructure-as-a-Service (IaaS) . Among the includ-ed services are infrastructure, network, storage, iden-

tity management and data management, to name a few .

OiX Government has a host of other features that outline and underline the focus that we place on data security .

Physical and network-isolated instance – The OiX Government is an ecosystem that is completely isolated from public access and each separate instance of its deployment is isolated from the other instances as well . It is not for public consumption and can only be accessed by authorized government organizations and their service providers and partners .Oix platform is aligned with several compliance requirements in different regions . OiX Government cloud architecture enforces stringent controls to enhanced security meet several compliance standards required by US Federal Government, FINRA, SEC such as NIST, FedRamp, GLBA and Gov .uk Open standards for government etc .Cloud Data storage – OiX Government Cloud offers reliable and scalable GPU Enabled Database, Big data analytics, Internet of Things, and backup and restore applications . The data storage infrastructure meets strict government data storage and archival requirement .Thorough Background checks – Every one of our team with any kind of access to the infrastructure – physical or virtual, goes through an exhaustive background check and meets the standards set by government . Identity Management – Identity Management, as set up within the OiX Government ecosystem FedRAMP Compliant Federated Identity Infrastructure which allows seamless authentication and authorization for exist-ing government information technology infrastructure .Compliance – OiX is constantly making efforts to keep abreast with the various compliance requirements . An exhaustive list of the standards we are actively following are to be found in Annexure 1 .OiX Government is also empowered to help agencies leverage their existing technology investments while reap-ing the benefits of cloud services . The flexibility and adaptability of the OiX Government Cloud allows for adop-tion by complex government organizational setups and inter-agency relationships .

OVERVIEWOiX Government Cloud aims to deliver a cloud

solution that offers solution that is designed spe-cifically to support diverse scenarios that different governments across the globe demand . We offer Infrastructure-as-a-Service (IaaS) and Software-as-

a-Service (SaaS) with the most secure and robust infrastructure . We offer infrastructure, network, stor-age, data management and identity management delivered through secure and compliant hybrid cloud solution .

OiX Government has been designed with focus on the following: ■ Ease of Use – We understand that technology

should be an enabler and not a barrier . This is the key focus of our solution – we are here to make the technology work for you instead of you work for getting the technology working for you . We have made it easier you’re your developers, system ad-ministrators, and architects to build, migrate, de-ploy, and manage applications . This makes scala-bility a matter of minutes not days and weeks .

■ Open and Flexible – We have a wide array of SaaS and IaaS solutions that are scalable and modular in nature .

■ Secure and Compliant – Our focus and under-standing of security is unparalleled . We are keep-ing the guidelines of an array of regulations in our purview . An exhaustive list can be found in Annex-ure 1 .

OIX GOVERNMENT FEATURES OiX Government is a highly capable solution of in-

frastructure, fabric, services, and the frameworks that can be used to develop complex solutions for govern-ment agencies .

The capability of OiX Government Cloud include IaaS and SaaS, providing a robust setup capable of

computing, network infrastructure, storage, and iden-tity management services . With the OiX Government Cloud the agencies are able to exercise the flexibility to choose either setup to quickly build, test, deploy, and manage applications .


CLOUD SERVICESOiX Cloud Services is the ideal choice for any

government agency where we take care of the infra-structure services like Operating system patching, monitoring and scaling . This gives the customer the freedom to concentrate on configuration and main-tenance of their applications and data .

When an application is developed to run on OiX GC, the code and configuration together form the OiX cloud service . Such creation of cloud service enables deployment of a multi-tier web application . OiX Cloud services can be used to support more complex mul-ti-tier architectures .

DATA MANAGEMENTWe provide multiple database options to enable

a more customized experience for the customer . They can choose between MySQL, PostgreSQL and MapD GPU Database . These three database services ac-

count for more than half of all database deployments . We also support additional deployment of other

data management solutions including but not limit-ed to Oracle and MongoDB .

NETWORKOiX Government, as a rule, maintains a physically

isolated network from its other ventures . The capa-bility necessary to securely connect VMs to one an-other and to connect on-premises government data centers with Azure Government VMs is leveraged via

Virtual networking . OiX blocks unauthorized traffic to and within our data centers . We leverage an assort-ment of technologies such as firewalls, partitioned Local Area Networks, and physical separation of back-end servers from public-facing interfaces .

IDENTITY MANAGEMENTOiX Government Blockchain Open Identity

Framework is standardized approach to information security implementation and management .

■ OiX Government Open Identity Framework value proposition is to disintermediation of identities and use DLT for compliance enforcement by tak-ing advantage of DLTs like Blockchain and recon-cile with applications and validate the user access in compliant with disparate compliance require-ments .

■ Open Identity Framework helps government agencies to sustain the adoption of blockchain as per adopted strategy and risk tolerance and fos-ter the culture of control and effectively pivot from build to sustain .

■ OiX Governance and accountability Solution en-compass layered rating system that specifically rates governance and controls .

■ OiX Blockchain Identity Governance extend X .509 Public Key Infrastructure and apply RFC 3161 trusted timestamps to time-sensitive transac-tions through independently verified and audit-able date and UTC (Coordinated Universal Time) sources . This provides a long term validation and non-repudiation of the time and date the transac-tion took place .

■ OiX Government Identity PKI and Digital Signa-ture Framework verify digital signatures and al-low verify different use cases such as IoT, Financial Transitions etc .

■ OiX Government platform aligns with Gov .uk Open standards for government and The Federal Risk and Authorization Management Program to enable government agencies to seamlessly adapt

the Block Chain applications and services . ■ OiX Open Identity Framework provides privacy

while allowing users, customers, manufacturers to participate in integrated application platform for Government Citizen Benefit Services and third party external service providers .

■ OiX Identity Framework helps disparate partici-pants in decision making to be authoritative and control/issue the lifecycle of authentication token , authorization tokens for devices and or applica-tions or transactions .

■ OiX Government Open Identity Framework in-creases ROI and promotes reusability to reduce cost .

■ OiX Hyperledger supports private (permissioned) Blockchain through its identity management ser-vice which authenticates all participants in the network .

■ OiX Open Identity supports SAML 2 .0, OAuth 2 .0, OpenID, and WS-Federations .

■ OiX Government Cloud Strong authentication uses natively integrated biometric security .

■ Every privilege action and or event requires 2 fac-tor authentication /authorization enforced by Bi-ometric security .

■ Users and system administrators Access to privi-lege system, data and or process requires biomet-ric validation and helps enforce the authentication and authorization control .

■ OiX Multi Signature Biometrics enabled Open Identity Framework can be used for both on-premises and OiX Government cloud applica-tions .


OIX GOVERNMENT SECURITY, PRIVACY AND COMPLIANCE OVERVIEWOiX Government works in tandem with customer

agencies to develop pioneering security, privacy and compliance practices . Although a startup, our com-pany has years of experience in its tam on implemen-tation, maintenance and innovation in both Block-

chain and Cloud development and management . Our teams focus on ensuring that we meet our own security and compliance standards consistently with-out fail as well as help our customers meet their com-pliance and regulatory requirements .

SECURITYOiX has standardized approach to security as-

sessment, authorization, and continuous monitoring for cloud products and services .

OiX adopts NIST Security standards FIPS compli-ant cryptography module to prove the authenticity and integrity of the digital assets .

The OiX security authorization uses the FedRAMP requirements, which are FISMA compliant and based on the NIST 800-53 rev3, (800-53, 8003-47) and FIPS 199 and 200

■ Improves real-time security visibility ■ Increase confidence in security of OiX platform ■ Provides a uniform approach to risk-based man-

agement ■ Ensure consistent application of existing security

practices ■ Increase automation and near real-time data for

continuous monitoring ■ Accelerate the adoption of secure OiX platform

through reuse of assessments and authorizations ■ Improves the trustworthiness, reliability, consist-

ency, and quality of the Federal security authori-zation process

■ Achieve consistent security authorizations using a baseline set of agreed upon standards to be used for OiX product approval in or outside of Fe-dRAMP

■ Prevent anyone — even root users and adminis-trators — from accessing sensitive information

■ Deny illicit attempts to change data or applica-tions within the network .

■ Carefully guard encryption keys using the high-est-grade security standards so they can never be misappropriated .

INFRASTRUCTURE PROTECTIONWe address security risks on a continuous basis

across our infrastructure inclusive of hardware, soft-ware, network and manpower . We have key focus on intrusion detection and prevention systems, denial of service attack prevention and regular penetration

testing . With OiX, our customers can greatly reduce their own investment on these capabilities and bene-fit from economies of scale that is set in by our enter-prise wide security initiatives .

NETWORK PROTECTIONOiX networking delivers the infrastructure need-

ed to securely link the Virtual Machines to one anoth-er and to connect the on-premises data centers with deployed OiX VMs . OiX blocks unapproved traffic to and within our data centers by using a variety of tech-nologies including but not limited to firewalls, parti-tioned Local Area Networks, and physical separation of back-end servers from public-facing interfaces .

Some of our measures are ■ Network isolation . ■ Virtual networking . ■ Encrypting communications . ■ Access monitoring and logging ■ Strong authentication ■ Role-based access control

DATA PROTECTIONWe rely on both technological safeguards, includ-

ing but not limited to end-to-end encrypted com-munication and streamlined and monitored opera-tion processes to help maintain security of Customer Data . Our scalable and adaptable setup means that customers can easily implement additional Securi-

ty measures and encryption and manage their own keys .

■ Data in transit . ■ Data at rest . ■ Data segregation . ■ Data destruction .

PRIVACYOiX believes that we have an obligation to keep

security measures in place so that they can rest as-sured that there is a robust infrastructure taking care of their privacy concerns . We also go all-out to ensure


that our Service Management measures are transpar-ent so that customer has clear visibility of where their data is and who has access to it .

Here is an abstract of our security approach: ■ Privacy by Design

■ Restricted data access and use ■ Contractual commitments ■ Control over data location ■ No use for advertising

COMPLIANCEOiX customers remain responsible for complying

with applicable compliance laws and regulations . In some cases, OiX offers functionality (such as security features), enablers, and legal agreements (such as the OiX Data Processing Agreement and Business Asso-ciate Addendum) to support customer compliance .

No formal certification is available to (or distrib-utable by) Open Investment Exchange cloud service provider within these law and regulatory domains .

■ CISPE ■ EU Model Clauses ■ FERPA ■ GLBA ■ HIPAA ■ HITECH ■ IRS 1075 ■ ITAR ■ My Number Act [Japan] ■ U .K . DPA - 1988 ■ VPAT / Section 508

■ EU Data Protection Directive ■ Privacy Act [Australia] ■ Privacy Act [New Zealand] ■ PDPA - 2010 [Malaysia] ■ PDPA - 2012 [Singapore] ■ PIPEDA [Canada] ■ Spanish DPA Authorization

OiX pursues disparate security and compliance standards across geographies and verticals, including ISO 27001, FedRAMP, and PCI DSS, CESG (UK), Singa-pore Multi-tier Cloud Security (MTCS) standards and applicable EU data protection laws . This means that customers, with existing deployments elsewhere, wishing to transfer personal data from the Europe-an Economic Area (EEA) to other countries can do so knowing that their content in OiX will be given the same high level of protection it receives in the EEA . OiX aspires to reduce the effort needed to perform audits, since these tasks become routine, ongoing, and automated . By spending less time on manual ac-tivities, manages risk and improves security posture .

BLOCKCHAIN READY CLOUDOiX Government Cloud is a Blockchain ready and

it is the most advanced and comprehensive offering of its own kind . OiX business cloud helps enterprises build and manage blockchain solutions without hav-ing to start from scratch . As more government records move on Blockchain, this will be a much sought after

service by government agencies and we can leverage our expertise in both the technologies .

For any further question on our Government Cloud offering please get in touch through our web-sites www .oix .global and www .oix .li

OIX FEDRAMP PROGRAM ASSESS AGAINST ALL FEDRAMP MODERATE CONTROLCOMPLIANCE

OiX pursues disparate security and compliance standards across geographies and verticals, includ-ing ISO 27001, FedRAMP, and PCI DSS, CESG (UK), Singapore Multi-tier Cloud Security (MTCS) standards and applicable EU data protection laws . This means that AWS customers wishing to transfer personal data from the European Economic Area (EEA) to oth-

er countries can do so knowing that their content in OiX will be given the same high level of protection it receives in the EEA . OiX aspires to reduce the effort needed to perform audits, since these tasks become routine, ongoing, and automated . By spending less time on manual activities, manages risk and improves security posture .


OiX FEDRAMP PROGRAM OiX Government Blockchain Open Identity Framework is a standardized approach to information security implementation and management .

■ OiX Government Open Identity Framework val-ue proposition is to disintermediation of identi-ties and use DLT for compliance enforcement by taking advantage of DLTs like Blockchain and reconcile with applications and validate the user access in compliant with disparate compliance requirements .

■ Open Identity Framework helps government agencies to sustain the adoption of blockchain as per adopted strategy and risk tolerance and foster the culture of control and effectively pivot from build to sustain .

■ OiX Governance and accountability Solution en-

compass layered rating system that specifically rates governance and controls .

■ OiX Blockchain Identity Governance extend X .509 Public Key Infrastructure and apply RFC 3161 trusted timestamps to time-sensitive trans-actions through independently verified and au-ditable date and UTC (Coordinated Universal Time) sources . This provides a long term valida-tion and non-repudiation of the time and date the transaction took place .

■ OiX Government Identity PKI and Digital Signa-ture Framework verify digital signatures and al-low verify different use cases such as IoT, Finan-


cial Transitions etc . ■ OiX Government platform aligns with Gov .uk

Open standards for government and The Feder-al Risk and Authorization Management Program to enable government agencies to seamlessly adapt the Block Chain applications and services .

■ OiX Open Identity Framework provides privacy while allowing users, customers, manufacturers to participate in integrated application platform for Government Citizen Benefit Services and third party external service providers .

■ OiX Identity Framework helps disparate partici-pants in decision making to be authoritative and control/issue the lifecycle of authentication token , authorization tokens for devices and or applica-

tions or transactions . ■ OiX Government Open Identity Framework in-

creases ROI and promotes reusability to reduce cost .

■ OiX Hyperledger supports private (permissioned) Blockchain through its identity management service which authenticates all participants in the network .

■ OiX Open Identity supports SAML 2 .0, OAuth 2 .0, OpenID, and WS-Federations .

■ OiX Government Cloud Strong authentication uses natively integrated biometric security .

■ Every privilege action and or event requires 2 fac-tor authentication /authorization enforced by Bi-ometric security .

■ Users and system administrators Access to privilege system, data and or process requires biometric valida-tion and helps enforce the authentication and authorization control .

■ OiX Multi Signature Biometrics enabled Open Identity Framework can be used for both on-premises and OiX Government cloud applications .


OiX GOLDTM HIGH NET WORTH, SOPHESTICATED AND INSTITUTIONAL BUYERS

One of the primary reasons why ICOs have thrived is the restrictive nature of going public all across the globe . ICos offer the opportunity of going public with-out spending too much on legal fees and documen-tation . Most of the time, this is not due to reluctanc to do so rather due to lack of resources and knowledge . Similar challenges may be foreseen while going for ISO and not ICO . The lack of resources can become a reason why issuers plan an ICO and go unregulated .

OiX Gold is the solution to this problem . OiX gold is the platform which gives gives issuers access to a

large pool of initial investors . Issuers will be able to pitch their idea to OiX pool of High-net worth, sophes-ticated and institutional investors and get their initial funding to invest in the process of Prototype and ISO .

Such a platform will be ideal for those who have a brilliant idea but not enough capital to take it public . They can pitch their ideas to investors who can get in on the ground floor anbd help the idea grow .

This is first such initiative by an exchange working in the blockchain domain .

OiX OPENTM

OiX OPEN is the platform that suppliments OiX Gold in the best way possible . OPEN Stands for OiX Professional Exchange Nertwork .

Among the two most scares resources as we have outlined in the pervious segment is the lack of funding to go public and the lack of right knowledge to structure a blockchain business . To tackle the first, we have the OiX Gold Platform and to tackele the second we have the OPEN initiative . Open is a pool of proferssionals like Investment Bankers, Stock Brokers, Investment Advisors, Legal Experts, Filing Agents and Influencers .

Through this platform, the issuers will be able to find the most capable professionals to guide their ICO and their ideas to success . Major exchanges have such pools but this is the first time that a blockchain exchange is coming up with a pool like this .


RISKMINIMIZERTM

Oix Platform is an innovative ecosystem that helps boith issers and investors work in an effectively

risk free environment that is backed by a regulatory oversight and strong KYC/AML Policy .

KEY FEATURES

■ COMPREHENSIVE DUE DILIGENCE: Even before a Token is on-boarded our team does as a thorough check on its, viability, its promoters and its safeguards . This enables our investors to invest with confidence .

■ BUILT-IN CHECKS: OiX platform is actively monitored both by algorythm and manually to ensure that the scenarios like pump and dump are vigorously discouraged .

■ RISK REPORTS: Risk reports are issued if we allow any token to on-board where one or the other check was not possible for any reason what-so-ever .

■ MONITORED BY OiX-GOLD INVESTORS: Our OiX gold investors (high-net-worth and sophesticated inves-tors) drive the ratings on RiSKMINIMIZER .

BENEFITS FOR PROMOTERS/ISSUERSBy availing the full-power of OiX platform, the

murky waters of ICO can be avoided without handing control of your finances to the uncertianlty that Block-chain tokens bring . We thoroughly asssess the viabili-ty of a project and the reputation of its promoters . This

means that we are able to generate a lot of confidence in the minds of the investors . You, as promoters, are able to generate a reputation for your token and your business idea because of our approval . This is how our RiSKMINIMIZER works for the Promoters .

BENEFITS FOR INVESTORSAny token listed on OiX is backed by our RiSK-

MINIMIZER policy . This means that we have already done a variety of security checks to ensure that the token is an investment in a genuine business backed by a viable business idea and a team that is capable of delivering what it has promised . We also have an

understanding with our promoters/issuers that they will practice full disclosure and keep the investors in-formed about the basic activities of the company . This is a concept that is being introduced for the first time in the blockchain token ecosystem .


LAWS / REGULATIONS / PRIVACY:OiX customers remain responsible for comply-

ing with applicable compliance laws and regulations . In some cases, OiX offers functionality (such as secu-rity features), enablers, and legal agreements (such as the OiX Data Processing Agreement and Business

Associate Addendum) to support customer compli-ance .

No formal certification is available to (or distrib-utable by) Open Investment Exchange cloud service provider within these law and regulatory domains .

■ CISPE ■ EU Model Clauses ■ FERPA ■ GLBA ■ HIPAA ■ HITECH

■ IRS 1075 ■ ITAR ■ My Number Act [Japan] ■ U .K . DPA - 1988 ■ VPAT / Section 508 ■ EU Data Protection Directive

■ Privacy Act [Australia] ■ Privacy Act [New Zealand] ■ PDPA - 2010 [Malaysia] ■ PDPA - 2012 [Singapore] ■ PIPEDA [Canada] ■ Spanish DPA Authorization

OiX COMPLIANCE PROGRAM

ALIGNMENTS / FRAMEWORKS:Compliance alignments and frameworks include

published security or compliance requirements for a specific purpose, such as a specific industry or func-tion . AWS provides functionality (such as security fea-tures) and enablers (including compliance playbooks, mapping documents, and whitepapers) for these

types of programs .Requirements under specific alignments and

frameworks may not be subject to certification or at-testation; however, some alignments and frameworks are covered by other compliance programs .

■ C5 [Germany] ■ Cyber Essentials Plus [UK] ■ DoD SRG ■ FedRAMP ■ FIPS ■ IRAP [Australia] ■ ISO 9001 ■ ISO 27001 ■ ISO 27017 ■ ISO 27018 ■ K-ISMS [Korea] ■ MTCS [Singapore]

■ PCI DSS Level 1 ■ SEC Rule 17-a-4(f) ■ SOC 1 ■ SOC 2 ■ SOC 3 ■ CIS ■ CJIS ■ CSA ■ ENS [Spain] ■ EU-US Privacy Shield ■ FFIEC ■ FISC

■ FISMA ■ G-Cloud [UK] ■ GxP (FDA CFR 21 Part 11) ■ ICREA ■ IT Grundschutz [Germany] ■ MITA 3 .0 ■ MPAA ■ NIST ■ PHR ■ Uptime Institute Tiers ■ UK Cloud Security Principles


GLOBAL

UNITED STATES

CSA

PCI DSS LEVEL 1

ISO 9001

SOC 1

ISO 27017

SOC 2

ISO 27018

SOC 3

ISO 27001Cloud Security

Alliance Controls

Payment Card Standard

Global Quality Standard

Audit Control Report

Cloud Specific Controls

Security, Availability, & Confidentiality

Report

Personal Data Protection

General Control Report

Security Management Control

CJIS

FIPS

DoD SRG

FISMA

FedRAMP

GxP

FERPA

HIPAA

FFIEC

ITAR

Criminal Justice Information System

Government Security Standards

DoD Data Processing

Federal Information Security Management

Government Data Standards

Quality Guidelines and Regulations

Educational Privacy Act

Protected Health Information

Finanacial Institutions Regulation

International Arms Regulations

MPAA NIST SEC RULE 17A-4(F) VPAT/SEC. 508Protected Media

ContentNational Institute of Standards and

Technology

Financial Data Standards

Accessibility Standards


ASIA-PACIFIC

EUROPE

FISC (JAPAN)

Financial Industry Information System

IRAP (AUSTRALIA)Federal Information

Security Management

K-ISMS (KOREA)

Korea Information Security

MTCS TIER 3(SINGAPORE)

Multi-Tier Cloud Security Standard

MY NUMBER ACT(JAPAN)

Personal Information Protection

C5 (GERMANY)Operational Security

Attestation

CYBER ESSENTIALS PLUS (UK)

Cyber Threat Protection

G-CLOUD (UK)

UK Government Standards

IT-GRUNDSCHUTZ(GERMANY)Baseline Protection

Mehodology


OUR FEE STRUCTURE30-Day Trading

Volume (BTC)

30-Day Trading

Volume (ETH)

Taker Fee Maker Fee Auction Fee

0 0 22 bps (0 .22%) 22 bps (0 .22%) 22 bps (0 .22%)

≥ 1,000 ≥ 15,000 20 bps (0 .20%) 18 bps (0 .18%) 18 bps (0 .18%)

≥ 2,000 ≥ 30,000 18 bps (0 .18%) 15 bps (0 .15%) 15 bps (0 .15%)

≥ 3,000 ≥ 50,000 15 bps (0 .15%) 10 bps (0 .10%) 10 bps (0 .10%)

≥ 5,000 ≥ 100,000 10 bps (0 .10%) 0 bps (0 .00%) 0 bps (0 .00%)

Our platform works with the lowest real-time, dy-namic fee structure that rewards more activity and gives the users the power to change howmuch they pay . We have fee structure that goes down to 0 bps and the highest we charge is 22 bps, one of the lowest top slab in the industry .

NOTE: Fees and account balances are not round-

ed, even though they may be displayed to you as rounded up or down to the smallest denomination for a given fiat currency or digital asset (e .g ., one pen-ny, one satoshi, which is 0 .00000001 BTC, or one wei, which is 10^-18 ETH) .

UNDERSTANDING MAKER AND TAKER

MAKERType 1 (seller): You tell the exchange that you want

to sell at price P, but P is higher than the highest price at which any Type 2 maker is currently willing to buy . (You're demanding too much money in the eyes of everyone who's said they want to buy .)

Type 2 (buyer): You tell the exchange that you want to buy at price Q, but Q is lower than the lowest price at which any Type 1 maker is currently willing to sell . (You're trying to spend too little money in the eyes

of everyone who's said they want to sell .)Since neither request could be matched against

any existing maker's request, you've just "added" li-quidity by listing your desired transaction on the ex-change's order book . Your order will sit there until it either gets filled (i .e . someone bites on your offer), ex-pires, or you cancel it .

TAKERType 1 (seller): You tell the exchange that you want

to sell at price R, and R is at or below the price current-ly advertised by at least one Type 2 (buyer) maker . (At least one known buyer thinks the amount of money you're asking for is reasonable .)

Type 2 (buyer): You tell the exchange that you want to buy at price S, and S is at or above the price currently advertised by at least one Type 1 (seller) mak-

er . (At least one known seller thinks the amount of money you're willing to spend is reasonable .)

Since your request can be matched against some listed maker's request on the exhange's order book, it will get executed against the best available maker's price and you will have "removed" liquidity by execut-ing against one or more makers' desired transactions from the order book .


OiX ROADMAP

■ Sending the whitepaper to potential investors ■ Partnerships with trust and financial companies ■ Alpha version of the exchange online

■ Exchange development with partnerships ■ Announcement of the ISO dates ■ Software Wallet Launch

■ Start of the OiX project ■ Initalting Platform Development

■ Website OiX .li online

■ First Listing of ISOs on the platform . The Final ver-sion of the exchange is onlline

■ International banking partnerships

■ Startup of compliance consulatancy services .

■ Whitelist Activation ■ Pre-ISO start ■ Beta version of the exchange online

■ ISO Start ■ OiX Hardware Wallet Launched

Q1 2018

Q4 2017

Q2 2018

Q3 2018

Q4 2018


OIX ERC23 TOKEN - Total Volume of Tokens 500,000,000 OiX

Public Token 50,000,000 OiX

Hard Cap $50,000,000

Soft Cap $5,000,000

PUBLIC TOKEN DISTRIBU-TION

Token Presales10%

Bonus Fund 10%

Bounty5% Pre-ICO

10%

ICO50%

Advisors 5%

BASIC FACTSHere is a snapshot of how the OiX ISO is going to be structured and presented .


ISO PHASES

FUND USAGELegal Compliance

30%

Marketing15%

Reserve5% Team Building

10%

Platform Upgrade 30%

Advisors 5%

O

Private Pre-Sale Pre-ISO ISO

Start: TBAEnd: TBA

Start: TBAEnd: TBA

Start: TBAEnd: TBA



A SHORT HISTORY OF BLOCKCHAIN The publication of The Trust Machine in The Economist in October 2015 pushed blockchain into the international spot-light. Since then the publicity has skyrocketed and today, blockchain is the biggest thing since the Internet. Although the article was a major catalyst, it was not the only reason for this success.

Penalized by the 2008 subprime crisis, people started to question traditional financial institutions. With communities beginning to show a lack of trust in the financial system, the demand for “people-to-people” solutions grew rapidly. By-passing supreme power structures and dealing directly on a consumer-to-consumer basis, this sentiment set the trend for blockchain development.

Following the financial crisis, Satoshi Nakamoto launched Bitcoin; a cryptocurrency enabling secure exchange without the need for trusted third party1 intervention. The idea was based on a simple observation: commerce on the Internet was relying almost exclusively on financial institutions to serve as an intermediary for processing electronic payments. For those wary of financial institutions, Bitcoin was the perfect solution. It was safe and anonymous, but people had to learn how to use it. Regrettably, Bitcoin also turned out to be an ideal means of payment for DarkWeb users.

When the banks set the rules At the time, blockchain was seen as a threat to modern banking, given that its autono-mous and trustworthy profile replaces the bank’s role as intermediary. However, it emerged that should banks wish to remain at the forefront of the technology and implement blockchain in their own operations, they can operate at un-precedented levels of efficiency at a fraction of their current costs. As soon as they realized this, banks started investing heavily in blockchain, thus sending entrepreneurs worldwide the message: “Blockchain has an immense potential, you

should look at it more closely”. A Deloitte study carried out in 2015 highlights the first use cases identified by the banks

BLOCKCHAIN APPLICATIONS AND SOLUTIONS

Exchanges Merchants Soft wallets Hard wallets

Retail banks Brokerage Payments Micro transactions

Payroll and insurance Corporate banks Trade finance Capital Markets

Trading Platforms Investments ATMs Money services

MIDDLEWARE AND SERVIC-ES

Services Software development

General APIs Special APIs Platforms Smart contracts


INFRASTRUCTURE AND BASE PROTOCOLS

Public Private Payment Miners

BLOCKCHAIN POTENTIAL US-AGE IN FINANCIAL SERVICESCOMMERCIAL BANKING

■ New and competitive products and services introduction ■ Cryptocurrency denominated products (e .g ., from Tinker, SolidX) ■ Asset and real estate tracking; physical asset registration (house, land, automobile) ■ Marketplace, P2P, and syndicated lending ■ Real-time loan funding and automated servicing via smart contracts ■ Personal financial management (PFM) ■ Liquidity management, cash reserve management, and intra-bank settlements ■ Customer acquisition and loyalty management

PAYMENTS ■ Micropayments / retail payments ■ Wholesale payments (correspondent banking network, cross-border FX) ■ P2P payments (BTC Jam, Coduis, BitBond) ■ Payments processing (e .g ., Coinbase, BitPay) ■ Exchange offerings and virtual wallet (e .g ., BitPesa, Bitreserve) ■ Currency exchange and cross-border remittances (Ripple, Kraken, MeXBT, Coinbase (Wallet))

RISK MANAGEMENT ■ Risk audit, risk underwriting ■ Counterparty risk management ■ Fraud risk management, identity theft prevention ■ Liquidity risk management; capital risk management ■ Systemic risk management (real-time global view) ■ Operational risk improvements

TRADE AND SUPPLY CHAIN FINANCE ■ Real-time multiparty tracking and management of letters of credit, bank payment obligations, open ac-

count instruments ■ Debt servicing, insurance, and factoring ■ Receivables financing ■ Commodities trade finance ■ Decentralized contracts execution ■ Document preparation services (trusted private e-doc exchange, real-time review, and approval of docu-

ments) ■ Interaction between import and export banks (eliminating the role of correspondent banks)


CAPITAL MARKETS ■ Clearing and settlement (Hyperledger, Serica) ■ Trade execution (real-time transaction matching, automated DVP on cash ledger) ■ Post-trade (trade reconciliation, trade reporting, monitoring and surveillance) ■ Custody and security servicing (escrow and custodian services, asset documentation; record keeping) ■ Derivatives transaction ■ Asset documentation / registries / servicing / exchange

REGULATORY COMPLIANCE ■ Automate compliance activities execution (e .g ., CCAR-related, real-time regulatory control limits enforce-

ment (e .g ., for asset rehypothecation)) ■ Regulatory process optimization (e .g ., in AML, KYC, CDD); KYC, AlvlL registries ■ Sanctions enforcement; tools for regulators (e .g ., for parsing real-time feed from Fls, audit trail for compliance

verification) ■ Regulator reporting automation (through smart contracts, DL as golden source, and unified regulatory re-

porting protocols)

CHARACTERISTICS OF COMMERCIAL TRANSACTIONS USING BLOCKCHAIN

■ Real-time records . Distributed ledgers are updat-ed in real time as transactions and other events oc-cur, with software automating the process . These features ensure that each network participant has its own up-to-the-moment record of transactions, which reduces opportunities for fraud . The auto-mated process and lack of a centralized record keeper also increase efficiencies and generate cost savings .

■ Immutable records . Blockchain technology en-ables entities to create permanent, immutable transaction records . This ability offers an obvious commercial benefit, but it can also raise regulato-ry risk for some parties . Regulators can be given permission to access full transaction histories in the event of an investigation involving transac-tions recorded to a blockchain, making it more dif-ficult for parties to argue that they lack adequate transaction records (see below Counseling Clients on Blockchain Investigations) . Additionally, main-taining a permanent record of certain transactions and users through a blockchain can implicate data privacy regulations, particularly as regulators in-creasingly focus on protecting consumer privacy .

■ Anonymity . Blockchain technology makes it easier for network users to be pseudonymous, which has

ramifications for operators of networks subject to anti-money laundering (AML) and know-your-cus-tomer (KYC) regulations (see below Anti-Money Laundering and Counter-Terrorist Financing Com-pliance) .

■ Cybersecurity risk . For a variety of reasons, block-chain networks have proven to be favorite targets for hackers . While no blockchain has been suc-cessfully hacked or manipulated, the companies and technology surrounding it have been . Secu-rity incidents have ranged from mundane ser-vice disruptions to more serious thefts of sensitive data and valuable cryptocurrencies, although the decentralized structure of blockchain networks makes them more resilient against network-wide attacks or tampering .

■ Tax implications . Blockchain transactions involv-ing virtual currency can give rise to unanticipated tax consequences depending on how the appli-cable tax authority treats virtual currency . The US Internal Revenue Service (IRS), for example, treats virtual currency as property, which means that a transaction may create the need to recognize a gain or loss on the exchanged cryptocurrency (see below Tax Treatment of Virtual Currencies) .


SOME FIs ALREADY LOOKING SERIOUSLY AT BLOCKCHAINR3 CEV

■ The startup is helping set up a private blockchain . Over 40 banks globally, including UBS, Barclays, JP Mor-gan, Credit Suisse, Royal Bank of Scotland, and Bank of America have supported R3 CEV

DEPOSITORY TRUST AND CLEARING CORPORATION (DTCC) ■ The major New York clearing house and provider of post-trade services selected IBM - in partnership with R3

and Axoni - to rebuild its trade information warehouse using distributed ledger (DL) framework ■ Solution would automate life cycle events, record keeping, and payment management for over USSI I trillion

of bilateral and cleared credit derivatives

UBS ■ Its UBS Crypto Pathfinder Program, that executes from its London-based Innovation Lab, comprises team

members from technology, finance, and business .Through this program, the bank aims to develop and pro-mote open standards for the blockchain technology for financial services industry - including investment banking, corporate banking, retail banking, and wealth management

■ The program team has been collaborating with UBS employees from business divisions across the world and also with numerous tech startups and external stakeholders such as banks, government, businesses, and universities

■ In partnership with Clearmatics, UBS has built Utility Settlement Coin (USC) . USC is an asset-backed digital cash instrument that is implemented on DLT and is meant for usage within the global institutional financial markets

■ UBS, Deutsche Bank, BNY l\/lellon, Santander, and inter-dealer broker ICAP pioneered a blockchain-based digital token that could form the industry standard for trades clearing and settlement

BARCLAYS ■ Barclays and Wave (an Israel-based innovative startup firm) became the first firms to execute a global trade

transaction leveraging the blockchain technology . Using this solution, the bank was able to reduce the time taken from 7-1 0 days to below four hours

■ Barclays, along with four other major banks, has worked with Thomson Reuters, Axoni, and IHS Markit to carry out successful testing of blockchain technology and smart contracts for managing affirmations and post-trade life cycle processing for over-the-counter (OTC) equity swaps

NASDAQ ■ Has leveraged Open Assets Protocol - a colored coin innovation that is built leveraging the blockchain ■ Launched blockchain-enabled solution for enhancing and expanding the equity management capabilities

of its Nasdaq Private Market platform


REGULATORS’ AND POLICY-MAKERS’ ON BLOCKCHAINEUROPEAN COMMISSION

■ New task force, to be overseen by the European Commission, has been created and entrusted with building expertise in blockchain technologies

■ In 2016, proposed to bring the virtual currency custodian wallet providers and exchange platforms within Fourth Anti-Money Laundering Directive (4AIVILD) scope

INTERNATIONAL MONITORY FUND (IMF) ■ In 2016, issued report that considers the risks and benefits of DLT ■ Recognizes the challenges in achieving balanced regulatory framework for blockchain applications, which

would require extensive international cooperation

FINANCIAL CONDUCT AUTHORITY (FCA) ■ Has begun monitoring blockchain developments . ls examining ways in which DLT can assist in regulatory

compliance ■ Through its Project Innovate, plans to work with firms that are developing DLT solutions . In the UK, inside

its Project Innovate, has considered approving a limited number offirms using blockchain technology . In November 2016, it approved nine blockchain-based firms to enter its Regulatory Sandbox Initiative

BAFIN ■ The German federal financial supervisory authority warned that the lack of a central regulatory authority for

DLT can lead to potential Anti-Money Laundering (ANIL), compliance, and governance issues

SWEDEN CENTRAL BANK ■ In November 2016, initiated an analysis of the possibility of introducing digital currency to supplement the

country’s cash

NEW YORK DEPARTMENT OF FINANCIAL SERVICES (NYDFS) ■ Published ‘BitLicense’ regulations for virtual currency businesses ■ The regulations are designed to prevent money laundering and to improve cyber security for virtual curren-

cy users

SWEDISH AUTHORITY ■ An approach is being tested by Sweden’s national land survey for ownership record of physical property ■ In this, a blockchain-based system for registering and recording the land titles is to be leveraged for digitiz-

ing the real estate processes

US FEDERAL RESERVEWorking with IBM to develop a new digital payment system that is tied to blockchain


WHY BLOCKCHAIN NEEDS TO BE REGULATED In 2015 and 2016, colossal sums were invested in blockchain worldwide. Toward the end of 2016 and throughout 2017 we’ve seen an explosion in the number of regulatory initiatives and use cases arising from those who were the first to adopt the protocol. Experts predict that by 2020 blockchain will be in mainstream use, but what is this protocol about? How did it become a trend? Despite emerging in 2008, why did it only take off a few years ago? Here, we try to answer these questions.

:

TOP BANK INITIAL USE CASES FOR BLOCKCHAIN - 2015 (IN %)


REGULATORY ISSUES ■ When talking about regulation, it is crucial to understand the different regulatory models pertaining to

transactions between a principal (public or private power), and an agent (a consumer): ■ a two-way relationship (for example, buying a coffee with money): the public indirectly act as a regulator

through the way they choose to spend their money; ■ a third-party transaction: the producer is regulated through the delivery of a service (a natural or public

monopoly such as an electricity supplier is formally regulated by a public regulator that works for the gov-ernment);

■ an oligarchic system: several consortia collude to obtain the power to regulate the supply of materials;


THE REAL MERCHANTS OF VENICEThe money lenders of Europe filled important

gaps left by the larger banks . Moneylenders traded debts between each other; a lender looking to unload a high-risk, high-interest loan might exchange it for a different loan with another lender . These lenders also bought government debt issues . As the natural evo-lution of their business continued, the lenders began to sell debt issues to customers the first individual in-

vestors .In the 1300’s, the Venetians were the leaders in

the field and the first to start trading securities from other governments . They would carry slates with in-formation on the various issues for sale and meet with clients, much like a broker does today . (To learn more about the history of money lending, see The Evolution Of Banking .)

THE FIRST STOCK EXCHANGE — SANS THE STOCKBelgium boasted a stock exchange as far back as

1531, in Antwerp . Brokers and moneylenders would meet there to deal with business, government and even individual debt issues . It is odd to think of a stock exchange that dealt exclusively in promissory

notes and bonds, but in the 1500’s there were no real stocks . There were many flavors of business-financi-er partnerships that produced income like stocks do, but there was no official share that changed hands .

ALL THOSE EAST INDIA COMPANIESIn the 1600’s, the Dutch, British, and French gov-

ernments all gave charters to companies with East In-dia in their names . On the cusp of imperialism's high point, it seems like everyone had a stake in the profits from the East Indies and Asia except the people living there . Sea voyages that brought back goods from the East were extremely risky - on top of Barbary pirates, there were the more common risks of weather and poor navigation .

To lessen the risk of a lost ship ruining their for-tunes, ship owners had long been in the practice of seeking investors who would put up money for the voyage - outfitting the ship and crew in return for a percentage of the proceeds if the voyage was suc-cessful . These early limited liability companies often lasted for only a single voyage . They were then dis-

solved, and a new one was created for the next voy-age . Investors spread their risk by investing in several different ventures at the same time, thereby playing the odds against all of them ending in disaster . (For more on how this practice plays out today, see: The Importance Of Diversification .)

When the East India companies formed, they changed the way business was done . These compa-nies issued stock that would pay dividends on all the proceeds from all the voyages the companies under-took, rather than going voyage by voyage . These were the first modern joint stock companies . This allowed the companies to demand more for their shares and build larger fleets . The size of the companies, com-bined with royal charters forbidding competition, meant huge profits for investors .

A LITTLE STOCK WITH YOUR COFFEE?Because the shares in the various East India com-

panies were issued on paper, investors could sell the papers to other investors . Unfortunately, there was no stock exchange in existence, so the investor would have to track down a broker to carry out a trade . In

England, most brokers and investors did their busi-ness in the various coffee shops around London . Debt issues and shares for sale were written up and posted on the shops’ doors or mailed as a newsletter .

THE SOUTH SEAS BUBBLE BURSTSThe British East India Company had one of the

biggest competitive advantages in financial history — a government-backed monopoly . When the investors began to receive huge dividends and sell their shares for fortunes, other investors were hungry for a piece of the action . The budding financial boom in England came so quickly that were no rules or regulations for the issuing of shares . The South Seas Company (SSC) emerged with a similar charter from the king and its

shares, and the numerous re-issues, sold as soon as they were listed . Before the first ship ever left the har-bor, the SSC had used its newfound investor fortune to open posh offices in the best parts of London .

Encouraged by the success of the SSC — and re-alizing that the company hadn’t done a thing except for issue shares — other “businessmen” rushed in to offer new shares in their own ventures . Some of these

EVOLUTION OF EXCHANGES


were as ludicrous as reclaiming the sunshine from vegetables or, better yet, a company promising inves-tors shares in an undertaking of such vast importance that they couldn’t be revealed . They all sold . Before we pat ourselves on the back for how far we’ve come, re-member that these blind pools still exist today .

Inevitably, the bubble burst when the SSC failed to pay any dividends on its meager profits, high-lighting the difference between these new share is-sues and the British East India Company . The subse-quent crash caused the government to outlaw the issuing of shares—the ban held until 1825 .

THE NEW YORK STOCK EXCHANGEThe first stock exchange in London was official-

ly formed in 1773, a scant 19 years before the New York Stock Exchange . Whereas the London Stock Ex-change (LSE) was handcuffed by the law restricting shares, the New York Stock Exchange has dealt in the trading of stocks, for better or worse, since its incep-tion . The NYSE wasn't the first stock exchange in the U .S . however . That honor goes to the Philadelphia Stock Exchange, but the NYSE quickly became the most powerful .

Formed by brokers under the spreading boughs of a buttonwood tree, the New York Stock Exchange made its home on Wall Street . The exchange’s loca-tion, more than anything else, led to the dominance that the NYSE quickly attained . It was in the heart of all the business and trade coming to and going from the United States, as well as the domestic base for most banks and large corporations . By setting list-ing requirements and demanding fees, the New York Stock Exchange became a very wealthy institution .

The NYSE faced very little serious domestic competition for the next two centuries . Its interna-tional prestige rose in tandem with the burgeoning American economy, and it was soon the most im-portant stock exchange in the world . The NYSE had its share of ups and downs during the same period, too . Everything from the Great Depression to the Wall

Street bombing of 1920 left scars on the exchange — the 1920 bombing, believed to have been car-ried out by anarchists, left 38 dead and also literally scarred many of Wall Street's prominent buildings . The less literal scars on the exchange came in the form of stricter listing and reporting requirements .

On the international scene, London emerged as the major exchange for Europe, but many compa-nies that were able to list internationally still listed in New York . Many other countries including Germany, France, the Netherlands, Switzerland, South Africa, Hong Kong, Japan, Australia and Canada developed their own stock exchanges, but these were large-ly seen as proving grounds for domestic companies to inhabit until they were ready to make the leap to the LSE and from there to the big leagues of the NYSE . Some of these international exchanges are still seen as dangerous territory because of weak listing rules and less rigid government regulation . (For re-lated reading, check out Broadening The Borders Of Your Portfolio and Why Country Funds Are So Risky .)

Despite the existence of stock exchanges in Chi-cago, Los Angeles, Philadelphia and other major centers, the NYSE was the most powerful stock ex-change domestically and internationally . In 1971, how-ever, an upstart emerged to challenge the NYSE he-gemony .

THE NEW KID ON THE BLOCKThe Nasdaq was the brainchild of the National As-

sociation of Securities Dealers (NASD) — now called the Financial Industry Regulatory Authority (FINRA) . From its inception, it has been a different type of stock exchange . It does not inhabit a physical space, as with 11 Wall Street . Instead, it is a network of com-puters that execute trades electronically .

The introduction of an electronic exchange

made trades more efficient and reduced the bid-ask spread — a spread the NYSE wasn't above profiting from . The competition from Nasdaq has forced the NYSE to evolve, both by listing itself and by merg-ing with Euronext to form the first trans-Atlantic ex-change . (To learn more, check out The Tale Of Two Exchanges: NYSE And Nasdaq and The Global Elec-tronic Stock Market .)

THE FUTURE: WORLD PARITY?The NYSE is still the largest and, arguably, most

powerful stock exchange in the world . The Nasdaq has more companies listed, but the NYSE has a mar-ket capitalization that is larger than Tokyo, London and the Nasdaq exchanges combined — and the merg-er with Euronext will make it larger still . The NYSE, once closely tied to the fortunes of failures of the

American economy, is now global . Although the oth-er stock exchanges in the world have grown strong-er through mergers and the development of their domestic economies, it is difficult to see how any of them will dislodge the 800-pound gorilla that is the New York Stock Exchange .


PERFORMANCE ■ Even as their adoption requires high initial capital costs, many blockchain applications have demonstrated

poor scalability, high transaction processing delays, and latency issues, especially where permissionless ledg-ers are involved

■ Owing to their very calculation-intensive cryptographic component, many DLs are significantly slower than the conventional databases

■ There is a risk that blockchain applications designed for sophisticated multi-jurisdictional use cases may not be scalable, optimally functional, secure, and cost-effective

■ Smart contracts are not fault-tolerant, and there are chances of coding issues . Reviews have found that large numbers of template contracts for Ethereum scripting system contain significant vulnerabilities . Digital cur-rencies have also shown that they are not always crash prone

■ In the blockchain setup, when major Fls act as full nodes, there is a risk that the DL size may become unman-ageable

■ As smart contracts are created by humans, these are prone to human error . Correcting errors in smart con-tracts is relatively difficult as these need to be specifically created for updates

INTEROPERABILITY ■ Interoperability is crucial to maximize the power of DLs . However, today, there is a lack of consensus on policy

and data interoperability ■ Using different DLs requires data-sharing capabilities . However, currently, the data exchange protocols and

formats are not mature enough . Rival blockchain technologies can undermine system interoperability ■ Owing to difficulty in transposing different consensus protocols, transaction reconciliation between different

DLs may be challenging ■ There are challenges in using wallet software with separate DLs . Currently, most DLs have their own wallet

software . Enabling common wallet for various DLs is difficult

STANDARDIZATION ■ There is a lack of industry alignment on certain key design points . For example, access requirements for

completely open versus permissioned ledgers, interoperability between networks, improvement approach-es, and governance processes

■ Common DL and network protocols and standards are lacking . Users currently have their own mix of tech-nology and back-office system stacks .There is also a lack of standard DLT tools or interfaces . This creates scalability and integration challenges

■ There is a lack of consensus on effective international standards and versions of blockchain . There is division between myriad approaches, namely, private blockchains (e .g ., R3, DAH) and open-ended blockchains (e .g ., Ethereum)



Documents

OIX PROSPECTUS