The SEC has given North Capital Private Securities the go-ahead to introduce a new crypto trading solution
North Capital Private Securities, a broker-dealer beind the Public Private Execution Network (PPEX), has received final approval from US regulators to run an alternative trading system (ATS) for the cryptocurrency industry. Back in March, the US Security and Exchange Commission (SEC) had approved the company’s ATS filing, according to North Capital CEO Jim Dowd, after completing a membership application with FINRA (the Financial Industry Regulatory Authority). With this approval, the firm is planning on launching its digital planning capabilities through its ATS.
According to Dowd, this ATS is different than any other one similar tool approved for the digital asset market, saying that most companies insert this feature only after the ATS was built. “We basically went the other way and said, ‘OK we’re going to do something de novo,’” Dowd said. This Public-Private Execution Network (PPEX) is bringing a specialized net to the market, and it will support secondary trades in all forms of exempt securities – this includes digital assets that are native to a blockchain.
This type of product does not have to follow the same disclosure and registration requirement the SEC has established. So, this exemption is for users who “don’t want to go through the brain damage and the cost of doing a registered offering,” said Dowd. Of course, choosing this way has its disadvantages; the private capital markets have usually less liquidity than the public one. Additionally, since things are kept private this market lacks transparency, which affects the potential investors from trusting the process.
“We’re going to offer a solution that’s kind of in-between a fully private illiquid non created asset and a kind of a traditional public offering,” Dowd said. To achieve this, North Capital Private Securities is implementing some procedures to establish disclosure requirements and other similar, which are compared to the public listing process.