Photo Credit To Connection Japan Via Flickr

FINRA, the Self-Regulatory Organization (SRO) for Wall Street, has finally approved a blockchain-powered platform for trading securities. FINRA announced that it had given its approval for the platform to proceed. With this green light, IOI Capital and Markets will be able to execute its plans of becoming a placement agent for digital securities that are placed privately. This will be done via a permissioned Hyperledger Fabric that runs on the blockchain. 

What the Top Leadership Had to Stay

Hamid Gayibov and Rashad Kurbanov have been working on this platform since July 2017. The platform is called iownit and the approval means that this firm will be able to issue securities and it could even join the secondary trading market. 

The approval is even more notable since there are so many other projects on the queue waiting for approval from FINRA. Some of the firms have been waiting for over a year to know their fate. According to a co-founder of the project, it took the company 18 months to win approval from FINRA. In comparison, broker-dealers usually need to wait for around 9 months to gain approval. The reason for this is that they had to prove their business was compliant with all aspects of the law. 

According to an official of the company, most of the issues that FINRA was looking for clarification revolved around post-trade processing for the secondary markets. The official said they needed to ensure that they had all the necessary protections for investors. For instance, they needed to ensure there were proper reporting and recording measures, the flow of money was secure, and that issuers have the tools to manage cap tables. 

A Platform for the Blockchain

IOI will not deal with crypto. Instead, it digitizes the process of issuing securities, the secondary trading process, as well as lifecycle management of the asset. It ensures that the private securities market for accredited and institutional investors is more efficient. 

This platform is different for public securities, such as those, which tZERO wants to tokenize. Private securities are negotiated between issuers and investors. According to an IOI official, the private securities market is characterized by a diverse array of instruments as well as infrequent transactions. He further expounded that the distributed ledger was the perfect tool for the nature of this market. This was because it would make it possible to implement smart contracts that can be modeled after existing financial instruments. This would all be possible without the need for a complex database, which is what happens for the normal OTC derivatives. 

IOI would not comment on how much market share it was targeting with its platform. However, it said that it had a target in mind in the next three years. The company says that this platform will come with very low fees and it will be easier to find data compared to existing platforms. 

The Name

The firm made it clear they would not pick a name with blockchain in it. A co-founder said that this was because it reminded him of the dot com tech hype which ended badly for all those involved. 

Notice: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. The information has been obtained from sources we believe to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the crypto currency they discuss. The information and content are subject to change without notice. Visionary Financial and its affiliates do not provide investment, tax, legal or accounting advice. This material has been prepared for informational purposes only and is the opinion of the author, and is not intended to provide, and should not be relied on for, investment, tax, legal, accounting advice. You should consult your own investment, tax, legal and accounting advisors before engaging in any transaction. All content published by Visionary Financial is not an endorsement whatsoever. Please also visit our Privacy policy; disclaimer; and terms and conditions page for further information.

You May Also Like

Bitcoin on China’s front-page News as the first Successful Application of Blockchain Tech

Looks like the controversial talk about the topic “Bitcoin? No. Blockchain? Of…

Crypto On Robinhood: How Are They Able To Offer Trading at No Charge?

Photo Credit To Viralleaks Zone Via Flickr Robinhood is one of the…
Bitcoin Miner Codes

Bitcoin Miner Codes: Everything You Need to Know

Bitcoin mining is a process that involves solving complex mathematical problems to…

Texan Authorities Shut Down Crypto Mining Firm That Promised Investment Returns

The State Securities Board recently ordered a crypto mining firm operating in…

Coinbase has extended its Crypto Visa Cards to Different Parts of Europe

Cryptocurrency is evolving, and a lot of crypto-based platforms are evolving with…

CME Reveals No Intent to launch physically-settled bitcoin futures

A senior executive of a large derivative and global markets company, CME…

Tron’s Justin Sun Signs Acquisition Deal with DLive Blockchain Streaming Platform

Justin Sun’s BitTorrent has recently acquired a blockchain-based live streaming platform, DLive.…
YFIII

YFIII: The 1st DeFi Project To Integrate Uniswap SDK & Staking On-Chain

YFIII is a brand new crypto project developed in 2020. It is…

Direct Challengers To Facebooks Libra Crypto Project Continue To Line Up

Photo Credit To Hemant Naidu Via Flickr On Monday, August 19, Binance…

Steven Seagal Settles with the SEC after Illegally Promoting Crypto Investment Project

Steven Seagal has agreed to pay a $314,000 fine to the SEC…