Silicon Prairie has been approved to operate an Alternative Trading System (ATS). An ATS is similar to a securities exchange but with different regulatory requirements. An entity must first be approved as a broker-dealer before applying to become an ATS. This will enable Silicon Prairie to offer secondary trading in securities.
Silicon Prairie is a FINRA-regulated Reg CF funding portal that enables the sale of securities issued by private firms. It is also licensed for the sale of securities under the state-based rules of MNvest, which allows firms to raise capital in Minnesota, Wisconsin, Iowa, and Michigan.
Silicon Prairie also offers investment banking services and other features.
According to a post by the firm, Silicon Prairie is also leveraging blockchain technology for the issuance and management of securities which may also be utilized on its secondary trading platform.
Other platforms have been approved to operate ATSs, Fintechs like tZERO, Forge, INX, etc., seek to provide liquid markets in securities. One of the best-known ATS is OTC Markets. Some, like SeedInvest (recently purchased by StartEngine), have yet to utilize its ATS approval.
Providing secondary trading in private securities, issued under Reg CF, Reg A+, and Reg D, addresses a market need for investors in private firms as it creates a path to liquidity beyond a public offering or M&A event.