Openfinance Securities Receives FINRA Approval for Updated Digital Securities Alternative Trading System (ATS)

Openfinance Securities, LLC, the Broker-Dealer and ATS behind the Openfinance digital securities trading platform, announced on Friday it has received approval for digital securities trading enhancements to its membership agreement with FINRA, relying upon the SEC’s recent Staff no-action letter clearing Openfinance’s digital ATS business model. The SEC no-action letter was posted last month.

The no-action letter provides clarity pertaining to a digital security trading process. The SEC is allowing a 3 step process as an alternative to a 4 step process that was said to “increases operational and settlement risks.”

Openfinance says its approval comes after more than two years of working closely with both the SEC and FINRA Staffs in support of legally compliant regulated trading of digital securities.

The SEC no-action letter issued last month acknowledges the view advocated by Openfinance that a complex ‘Four Step’ process to guide broker-dealers involved in the transfer of digital securities could create unnecessary and undesirable operational and settlement risks.”

Speaking about the approval, Openfinance CEO, Jim Stonebridge:

The United States financial industry has long been the world’s leader due to its combination of established regulatory investor protections and the unparalleled capital those protections attract.  Openfinance has long believed that the path to successful financial industry adoption of blockchain’s advantages was through registered entities acknowledging the unmatched benefits provided by the United States’ regulated financial system.”

Openfinance regulatory counsel Patrick Daugherty, of Foley & Lardner LLP, went on to add:

“Openfinance was early among blockchain fintech participants to recognize that seeking and obtaining regulatory approval was both a competitive advantage and the only sustainable path to critical mass in the United States financial system.  We are pleased to work with groups that take this responsible approach because it rightly enhances their credibility with US regulators who wield enormous power over participation in capital markets.”

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