Araby Patch • Jun 14, 2019
This Issuer Spotlight was featured in V.3 Issue 02 of The Protocol Newsletter, an inside examination of the accomplishments within the digital securities industry. The Protocol Newsletter features issuers, issuance platforms, marketplaces, broker-dealers, custodians, marketers, and more, with a specific interest in their real-life stories about what it takes to issue and manage digital securities on public and permission-based blockchains.
Our goal is to provide the digital securities industry with invaluable insights and to serve as a resource for those looking to issue digital securities in the future.
In this issue, we will be taking a closer look at Open Finance Network.
1. Describe Openfinance and it’s current place in the market.
Openfinance is transforming alternative asset investing with the first U.S.-regulated platform for the secondary market trading of digitally-formatted securities. Backed by a team of industry veterans and key partnerships, Openfinance provides access to liquidity and investment opportunity in the $8.8+ trillion alternative asset market. The platform enables market participants to buy, sell and list a range of digitally-formatted securities, enabling a more efficient and secure secondary market.
2. Would you consider yourself and Openfinance as pioneers of something greater?
We’re part of the broader movement of the democratization of finance, a movement that entails everyday investors taking more control of their financial future. We have proven that private offerings can be traded in a regulated environment on-chain. With this accomplished, now larger and more traditional issuers and sponsors of illiquid securities are taking note and have expressed interest in digitizing. This will, in turn, bring greater opportunity forward for issuers and investors alike.
3. How did it feel to be the first to market to put digitally-formatted securities in secondary markets before anyone else?
It felt great! However, it was still very nerve-racking as it’s such a new space, being first to market meant we had to figure out a lot of things for the first time, things that had never been done before in the industry. Fortunately, our team was able to pull through and we have been operating smoothly since our launch.
4. What did you learn from the first iteration of putting digitally-formatted securities on the secondary market?
That our team was able to use software to codify securities law in a way that allows for the adherence to the current regulations while still enabling full flexibility and transparency for market participants
5. Now that there are digitally-formatted securities trading, what specifically needs to happen to grow the industry?
Custody is still a major hurdle in the tokenized asset sector. Many institutional participants are still waiting for a secure, regulator-approved solution to this problem, but to date, there hasn’t been a clear answer given. As regulations become more clear, we will see more institutional participation which will help create liquid markets.
6. Date of first official trade + token that was traded (not a test, but a real trade)
November 28th, 2018, SPiCE Token
7. What types of tokens are trading on Openfinance at the moment?
We are currently trading 4 of the 5 compliantly issued tokens. These include BCAP and SPice, both tokenized Venture funds. We can’t specifically mention the others by name due to compliance guidelines around the expiration of the securities’ legally-mandated holding periods.
8. What type of activity have you seen on the platform?
We’ve been really pleased with the trading activity since launch. It is important to recognize that we are talking about a handful of securities with a combined “market cap” of $50-$60m. To date, only non-US investors have been able to transact on the platform due to required holding periods for US investors. Despite these constraints, we feel that we have clearly established a proof of concept to show that these assets can be traded in a compliant fashion on-chain. As more offerings become available to list, each will bring more investors to the market and generate more and more volume.
9. How issuers can contact Openfinance to list tokens
Issuers interested in learning more can reach out to Shea Curran at firstname.lastname@example.org
About Open Finance Network
OpenFinance Network (OFN) is the first U.S. regulated security token trading platform to market. A trusted player in the alternative assets space since 2017, OFN addresses the lack of liquidity by providing a regulated and efficient trading platform for security tokens. Through our affiliated broker/dealer (Sageworks Capital, LLC, Member FINRA/SIPC), OpenFinance Network is an SEC designated ATS set up to trade security tokens. OFN has strategic partnerships with several key players in the security token and blockchain space and is the first regulated security token trading platform to market.
To learn more please visit https://openfinance.io/
Securitize delivers trusted global solutions for creating compliant digital securities. The Securitize compliance platform and protocol provide a proven, full-stack solution for issuing and managing digital securities (security tokens). Securitize’s innovative DS Protocol has the highest adoption rate in the industry and enables seamless, fully compliant trading across multiple markets simultaneously. Multiple Securitize powered digital securities are already trading globally on public marketplaces with many more in the pipeline.
To learn more please visit our website.
Araby Patch is the Director of Marketing for Securitize