North Capital Investment Technology (NCIT), a provider of technology services for exempt securities offerings, has launched a new custody solution for funding platforms and introducing brokers.
The new service will enable the creation and funding of specialised brokerage accounts at North Capital Private Securities (NCPS), a wholly-owned subsidiary of NCIT, to hold cash and unregistered securities that have been issued in exempt offerings. NCPS was approved as a self-clearing broker-dealer in late 2016 by the Financial Industry Regulatory Authority (FINRA), the self-regulatory authority for registered Broker-Dealers. North Capital Private Securities is an SEC-registered broker-dealer, member FINRA and SIPC.
“Today, the settlement process can take as long as 30 days, and issuers and brokers have to chase investors for funding once they have committed to a deal. It’s a significant burden for both platforms and investors,” says Sara Borazan, Director of Business Development of North Capital. “We have taken feedback from our clients to craft a solution that will address this pain point, while increasing transparency for investors.”
The firm invited strategic partners to participate in the 1 November beta launch of cash custody services at the inaugural North Capital Partner Summit, held in Salt Lake City on 26 September. Custody for exempt securities is expected to roll out later this year.
“Inconsistencies in disparate processes can cause a true operational drain,” says Lawrence Fassler, corporate counsel at RealtyShares, Inc, a real estate investment platform that gives investors direct access to investment opportunities and real estate operators the ability to raise capital. “This solution has the potential for our firm to bring escrow, brokerage and custody of exempt securities into a single, seamless technology platform that is compliant.”
Since its inception, North Capital has strategically added capabilities that address the consecutive stages in the life-cycle of exempt securities, beginning with brokerage and transaction services. The firm added AIP processing in 2013 and escrow services in 2016. Earlier this year, NCIT received a strategic investment from ConsenSys, AG, a venture production studio building decentralised applications and various developer and end-user tools for blockchain ecosystems, to accelerate the growth of its custody platform and secondary trading infrastructure.
