Republic, a leading online investment platform that provides access to capital for issuers as well as access to secondary offerings, recently met with the Securities and Exchange Commission (SEC) to discuss key issues which will impact online capital markets as well as secondary trading of private securities.
Republic is a leader in the securities crowdfunding sector operating both in the US and Europe via its acquisition of UK based Seedrs. The platform has also been at the forefront of tokenization of private securities as well as enabling access for investors of more mature private firms.
Republic’s acquisition of INX Securities, including its ATS (alternative trading system), is part of the firms’ vision to facilitate trading of private securities. In the UK, Republic Europe is home to the most successful secondary market, albeit it remains quite small.
Republic recently received a strategic investment from Hamilton Lane (Nasdaq:HLNE) to fuel its mission of “expanding retail access to private markets.”
In a memo from last month, Republic stated that due to its exposure in both the UK and the European Union they could provide the SEC with perspective on “how tokenization is evolving on the international stage, including innovative solutions we believe should be introduced in the U.S.”
The company also noted its interest on further guidance on secondary transactions.
Both primary offerings and secondaries will benefit greatly from tokenization as blockchain technology can reduce intrinsic friction in the issuance, management and trading of these digital assets. It may also enable a new coterie of novel assets which were previously difficult to access.
While the specifics were not immediately available, Republic discussed the “Innovation Exemption” as discussed by SEC Chairman Paul Atkins.
Atkins continues to share his opinions on how an Innovation Exemption could further enable digital asset innovation and capital formation for the crypto sector. Republic sees the concept enabling new products.
Atkins’ early thoughts include scaled disclosure requirements and laddered funding caps somewhat similar to the established securities crowdfunding regimes.
In many respects, Republic has been a trailblazer in the private securities marketplace, pushing the envelope in applying securities law to generate opportunities for both issuers and investors – including retail and Accredited ones. Earlier in March, Republic met with SEC Commissioner Mark Uyeda who is supportive of Fintech innovation, and they described the more recent meeting at the SEC as a follow up to the “productive” meeting.
The advent of the Trump Administration, and its support of digital asset innovation, has been a boon for the Fintech sector and the companies developing new technology. The SEC Chairman aims to empower the digital asset sector with new rules while “making IPOs great again.” Both public and private markets can benefit from tokenization and the consensus is that eventually all securities will be digital.
As for Republic, it has continued to iterate and offer new products, scaling its platform from its early days as a Funding Portal more focused on startups.
Perhaps the largest challenge for Republic is the host of other digital asset platforms that see the same opportunities. Firms like Coinbase are sizing up the potential to incorporate primary offerings as part of their services which recently added traditional equities as it strives to become the “everything platform.”