Open Finance digital securities trading platform receives FINRA approval

Openfinance Securities, LLC, the Broker-Dealer and ATS behind the Openfinance digital securities trading platform, has received an unprecedented approval for digital securities trading enhancements to its membership agreement with FINRA – relying upon the SEC’s recent Staff no-action letter clearing Openfinance’s digital ATS business model.

Openfinance’s approval comes after more than two years of working closely with both the SEC and FINRA Staffs in support of legally compliant regulated trading of digital securities.  The SEC no-action letter issued last month acknowledges the view advocated by Openfinance that a complex “Four Step” process to guide broker-dealers involved in the transfer of digital securities could create unnecessary and undesirable operational and settlement risks.

FINRA’s approval, following the SEC’s breakthrough decision, sets Openfinance apart from other trading venues by enabling a more accessible, liquid, and transparent market for privately offered digital securities.  “The United States financial industry has long been the world’s leader due to its combination of established regulatory investor protections and the unparalleled capital those protections attract.  Openfinance has long believed that the path to successful financial industry adoption of blockchain’s advantages was through registered entities acknowledging the unmatched benefits provided by the United States’ regulated financial system,” said Openfinance CEO Jim Stonebridge. 

He added: “We are grateful to both the SEC and FINRA for their substantial efforts to further that vision, including the approval of our recent digital securities ATS enhancements.  It has been a long path we have successfully navigated together, but Openfinance is excited about the opportunities this approval represents for our first-to-market digital security trading platform.”

Openfinance regulatory counsel Patrick Daugherty, of Foley & Lardner LLP, added: “Openfinance was early among blockchain fintech participants to recognize that seeking and obtaining regulatory approval was both a competitive advantage and the only sustainable path to critical mass in the United States financial system.  We are pleased to work with groups that take this responsible approach because it rightly enhances their credibility with US regulators who wield enormous power over participation in capital markets.”