Netcapital Inc. (Nasdaq: NCPL, NCPLW), a digital private capital markets ecosystem, has recently announced that its wholly-owned subsidiary, Netcapital Securities Inc. (NSI), has reportedly received approval from the Financial Industry Regulatory Authority (FINRA) in order to become a FINRA-member broker-dealer.
Key Highlights shared by the company:
- Netcapital Securities Inc. is specifically approved to engage in the following types of business: private placements of securities and referral business.
- The purpose of Netcapital Securities Inc. is to support companies (i.e., issuers) raising equity capital under Regulation A (Reg A) and/or Regulation D (Reg D), and to partner with other broker-dealers to collaboratively syndicate deals.
- This approval allows Netcapital to support larger fundraises while potentially offering its investor base a broader range of investment opportunities.
- Additionally, this approval enables Netcapital Securities Inc. to charge fees on the capital issuers raise under Reg A and Reg D, and to enter into fee sharing agreements with other broker-dealers.
Martin Kay, CEO of Netcapital Inc., said that this is a major milestone for Netcapital, positioning them to “expand their offerings and allowing them to better serve their clients by supporting larger capital raises,”
As covered, Netcapital Inc. is a fintech company with a scalable tech platform that allows private firms to raise capital online and “provides private equity investment opportunities to investors.”
The firm’s consulting group, Netcapital Advisors, provides marketing and strategic advice and takes equity positions in select companies.
The firm’s funding portal, Netcapital Funding Portal, Inc., is registered with the U.S. Securities & Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FINRA), a registered national securities association.
Earlier this year, Netcapital announced the launch of its beta version for a secondary trading platform to a closed group of users.
Through a previously announced trading relationship with Templum Markets – a company that operates an ATS, this secondary trading platform may provide investors who purchase stock “through the Netcapital funding portal with the potential for secondary trading through access to Templum’s alternative trading system.”
Templum is a company that provides capital markets infrastructure for trading private equity securities and operates “an alternative trading system (ATS) with approval in 53 U.S. states and territories for the trading of unregistered or private securities.”
