StartEngine Launches Secondary Marketplace for Securities Issued on its Platform and Others

StartEngine, one of the largest securities crowdfunding platforms in the US, has announced the official launch of its long-anticipated secondary marketplace.

StartEngine has been approved to operate an ATS or Alternative Trading System for some time now. Yet the launch of the previously announced platform has taken many months to come to reality. In an email, StartEngine said that starting today (July 14, 2023), buyers and sellers may post their interest on a bulletin board (StartEngine Marketplace) for shares issued via their platform – as well as other investment crowdfunding platforms.

StartEngine focuses on issuers raising capital under Reg CF (Regulation Crowdfunding) and Reg A+ (Regulation A). Under Reg A+, an issuer may choose to make its shares available for trading immediately. For other exemptions, like Reg CF – there is a waiting period to sell shares. StartEngine did not clarify if it would make shares issued under Reg D available for trading.

StartEngine said that over 6000 securities are now available on the marketplace. Sellers are subject to a 5% fee, and buyers are subject to a 3.5% fee.

StartEngine said that while a security may be displayed on the marketplace, these securities may be subject to certain restrictions which may prevent the ability to buy and sell these securities in a timely manner.

Even if a security is qualified to be displayed on the bulletin board, there is no guarantee an active trading market for the securities will develop.

On the platform, StartEngine notes that transactions may take 30 days or more. After 90 days, if a trade is not completed, it will be canceled.

StartEngine is addressing an important issue in the private securities market – liquidity. Typically, purchasing a private security means the investor needs patience as an exit opportunity is usually via a public offering or M&A event. Be operating a secondary platform, investors have the option to sell a security prior to the aforementioned events. While there has been decent secondary activity in Reg D private markets, securities issued under Reg A+ and Reg CF have seen little liquidity. While many observers believe trading activity will take time to develop, the growth of private securities should boost secondary transactions over time.

StartEngine Marketplace is operated by StartEngine Primary, a FINRA-regulated broker-dealer that is registered with the SEC.


Sponsored Links by DQ Promote



Send this to a friend