Point-Backed Securities

What is a 'Point-Backed Security - PBS'

A point-backed security (PBS) is a financial instrument backed by portfolio of points issued by operators of loyalty programs. PBS represents a new asset class with attractive risk-return profile incorporating exposure to the largest consumer facing sectors of the economy (e.g. travel, hospitality, retail, financial services and telecom).

For issuers, points-backed securities represents a new financial instrument monetizing the power of loyalty points either to raise capital for operations or investment activities. For investors, PBS represents an opportunity to earn an attractive risk-adjusted return and diversify portfolios.

Marketplace Structure

Affinity Capital Exchange (ACE) serves institutional members that fall into three categories – sponsors of point based loyalty programs, institutional partners and financial sponsors. ACE does not serve retail investors or the general public. ACE incorporates two market venues - Primary and Secondary.

  • ACE Primary – for initial offering of PBS, including securitizations

  • ACE Secondary – for trading of existing PBS.