Archax, the highly anticipated digital securities exchange, has just announced its successful bid to become a fully regulated Virtual Asset Service Provider (VASP), digital securities custodian, and digital securities exchange.
These designations, which are issued by the Financial Conduct Authority of the UK, represent huge milestones on the company’s path to launching its secondary marketplace.
It was initially expected that Archax would launch its exchange in the latter half of 2019. This was delayed, as the company waited for authorisation by the FCA.
The wait appears to be coming to an end though. In this positive announcement, Archax indicates that it is now regulated as an SME Growth Market, and Secondary Market for Digital Instruments to Trade. This means that, under the watch of the FCA, Archax can now offer the following services:
- Multilateral Trading Facility
- Custodial Solutions
- Brokerage Services
Archax CEO, Graham Rodford, touched on the authorisation process, and its importance, stating,
“We have been talking to the FCA for a while and the application process has been a tough journey, but we are pleased to have now achieved our first significant milestone as we prepare to launch the UK’s first FCA regulated digital securities exchange later this year.”
In addition to achieving these authorisations by the FCA, Archax has also successfully completed its registration as a VASP. This designation is a newly mandatory requirement in the United Kingdom, which was imposed in early 2020. The purpose of this registration is to allow sufficient oversight of companies dealing with digital assets, such as security tokens, as the FCA does its part to eliminate money-laundering and nefarious activity.
A secondary market refers to a trading platform for previously owned securities – meaning trades occur between investors, rather than with a security’s initial issuer. These platforms are essential for the health of securities, as they provide investors with access to liquidity in their holdings.
While Archax will offer a variety of services, it is arguably its secondary marketplace which is the most anticipated. Currently, there are very few companies that offer such services – partly because there simply have not been enough digital securities issued to warrant them. This is changing, however, making these trading hubs pivotal for the continued adoption of this promising sector.
Currently, the most well-known secondary market to support digital securities is OpenFinanceNetwork (OFN). Unfortunately, due to the slow-moving development of the digital securities sector, OFN has recently had financial issues, prompting a change in tactics.
David Lester, Advisor to Archax, and former CSO of the London Stock Exchange, touched on the importance of blockchain and what Archax is trying to achieve, stating,
“In the current global economic climate, providing new, efficient ways for small and medium sized businesses to access capital is key. Blockchain and tokenisation are innovations that can empower more frictionless and transparent markets which, combined with an FCA regulated exchange like Archax, can deliver what capital providers, business leaders and founders now really need. The launch of the Archax exchange will help bring the institutional and digital asset communities closer together, and open up a new era for the global financial markets space.”
Steady Stream of Collaborators
While the launch of Archax’s marketplace has taken longer than originally intended, the company has not been sitting idly by, as it waits for the necessary licensure.
Over the past year, Archax has managed to establish various partnerships. Some of these tap into services offered by Archax, while others will act as service providers themselves, helping Archax round out its comprehensive offering. The following are a few of these companies which have seen the promise in Archax, and decided to work together.
It was recently announced that upon launch, Archax will provide full support for the bevy of digital securities generated by Polymath.
Part of offering a comprehensive suite of services for digital securities involves addressing custody solutions. For Archax, this was done through a collaboration with Unbound Tech – a New York based company specializing in custodial capabilities.
Similar to its partnership with Polymath, Archax will provide support for digital securities issued through Globacap and its DSO services.
Making waves in the UK through its tokenization of real estate, Smartlands will soon benefit from the launch of Archax’s marketplace, as it will act as a home and trading platform for such assets.
In this collaboration, Archax’s forthcoming marketplace will support the trading of digital securities issued through Tokeny – Much like the aforementioned agreements with Polymath, Smartlands, and Globacap.
Operating a comprehensive marketplace for digital securities is a complex endeavour, requiring various payments solutions, API services, and more. To address this, Archax has collaborated with Clearbank, which will provide access to these needs.
If one thing is made clear from these various collaborations, it is that users of the upcoming marketplace will have no dearth of assets to trade and gain exposure to.
“Our technology partners are second to none, we have a pipeline of 35 digital issuances in place, and we are signing up global brokers and market makers ready for go-live.”
Speaking with Graham
In our on-going interview series here at securities.io, we have been fortunate to have completed an exclusive discussion with Archax CEO, Graham Rodford.
In this discussion, we learn more about what the company’s goals are, how they plan to achieve them, and what sets it apart from the competition. Make sure to peruse the discussion HERE to learn more about this promising company.
Founded in 2018, Archax maintain operations in London, United Kingdom. Above all, Archax hopes to serve both professional and institutional investors through the imminent launch of its digital securities marketplace.
CEO, Graham Rodford, currently oversees company operations.
Financial Conduct Authority (FCA)
Founded in 2013, the FCA is a financial services regulator within the United Kingdom. The goal of this regulator is to ensure fair and transparent markets for all participants.
Chief Executive, Nikhil Rathi, currently oversees operations at the FCA.
In Other News
One of the reasons that Archax has found itself on the cusp of its product launch, is the support of early investors. One such investor recently caught our attention, as it has also taken steps forward. This would be SPiCE VC, and its newly formed collaboration with Coinbase Custody.
Click HERE to learn more about how SPICE tokens have found a new safe haven through Coinbase’s custodial services.