The Public Private Execution Network (PPEX), an alternative trading system (ATS) for exempt digital assets and other private securities, has regulatory clearance for launch in the United States.
The parent company of the trading system, broker-dealer North Capital Private Securities, completed FINRA's application for continued membership in February and received SEC approval when it filed the ATS form in March, said Jim Dowd, CEO by North Capital.
Dowd said this was a noticeable difference from many other approved exempted digital asset ATSs that were only reorganized to manage digital securities after they had already been implemented.
The mission of the PPEX
PPEX will enter the US markets Investors capital with a broad but specialized network. According to Dowd, PPEX supports secondary trading for all types of exempt securities, including digital assets native to a blockchain.
These private equity products are not subject to the same disclosure and registration requirements as their publicly traded products that must register with the SEC.
The exemption appeals to issuers that "do not want to suffer fundamental damage and the cost of making a registered offer," said Dowd, but also gave a warning: private capital markets are generally less liquid than those public, and their lack of transparency makes it difficult for potential investors to know what they are getting into.
PPEX will attempt to address both, said Dowd. "We will offer a solution that lies between an undeveloped, illiquid, completely private resource, and some sort of traditional public offering," said Dowd.
His plan will establish due diligence procedures, disclosure requirements and other processes comparable to the public listing process. Dowd said that PPEX also addresses rampant technological deficiencies in private capital markets, where the systems on which the securities trade - if they trade on systems - they are often far behind the times. This is particularly evident in the era of COVID-19, he said.
TransactAPI and PPEX
North Capital's crypto ventures were born shortly after the July 2017 DAO report was released. "However, the explosive market growth has shown that investors want to trade private stocks," Dowd wrote to the SEC. "(North Capital) Offers a means by which responsible and regulated ATS intermediaries and distributors can develop market protocols and systems for trading private securities on secondary markets."
North Capital previously released an issue tool in TransactAPI, which allows broker-dealers to conduct online offers of private digital assets and other exempted securities that PPEX, a secondary trading system, can now support in trading.
Dowd said that TransactAPI has been involved in 1.000 transactions worth $ 1,9 billion in total. Although digital assets are only a part of TransactAPI and PPEX's larger private equity trading capabilities, they represent perhaps the most transformative point, at least from a technological perspective, said Dowd.