Award-winning Fintech visionary broker-dealer Rialto Markets’ alternative trading system (ATS) is aiming to unlock secondary trading in the private securities market for retail and accredited investors.
It will also potentially support exciting private company issuers raising capital through crowdfunding using a combination of Reg CF, Reg A+ or more institutional Reg D investment offerings.
Equity crowdfunding is rocketing, raising $113.52 billion last year according to Pitchbook data, a year-on-year increase of 1,021%, while Forbes reported the private securities market would be worth a record $7 trillion last year while forecast to hit $30 trillion by 2030.
Such potential is highlighted by the fact that the USA currently has 27 million private companies, yet only 1% are currently traded on an ATS.
This emerging secondary market for private securities contrasts strongly with the traditional public markets and trading platforms like the Nasdaq, where share values slid 21% in the last month according to Google Finance.
Crypto and other digital assets such as NFTs (Non-Fungible Tokens) values have also come under pressure recently as suggested by shares in Coinbase, America’s largest cryptocurrency exchange, dropping by 54% in the last month. Similarly, the price of Bitcoin has dropped 57% since its high six months ago.
US Securities and Exchange Commission (SEC) Chairman Gary Gensler has strongly repeated his view that cryptocurrencies are securities and must come into the SEC’s regulatory orbit.
Gensler has also increased the regulator’s Crypto and Assets Cyber Team within the SEC Division of Enforcement to 50 by adding 20 new dedicated positions.
Gensler said: “Most crypto tokens involve a group of entrepreneurs raising money from the public in anticipation of profits – the hallmark of an investment contract or a security under our jurisdiction.”
Gensler’s view on stronger regulations for digital securities has long been endorsed by Wall Street and private securities experts at award-winning broker dealer Rialto Markets where Co-Founder and COO Joel Steinmetz said:
“The key issue with all crypto and digital securities is that investors and regulators want greater confidence, security and redress, so that these private securities can thrive in a fully regulated environment.
“Through a secondary private market ATS (alternative trading system), investors can place orders to buy shares in companies that have already closed their offerings, while the earlier investors in these private companies have the potential to trade value in those assets.
“As long as demand is there for these assets, we see this as a great opportunity for private company issuers as well as digital asset owners to open up a secure secondary market to trade with confidence.”
Rialto Markets’ own Rialto MarketBoard ATS has achieved these regulatory milestones, and can enable private securities to be bought and sold for as little as $10 and is open to all types of investors: retail, accredited and institutional.
Rialto MarketBoard joined several US ATS platforms such as BrokerTec and Dash ATS but will be one of the nation’s first to focus on enabling transactions in privately held securities.
Rialto Markets also expects NFTs, cryptocurrencies and other types of digital assets to also move into a much more regulated environment – as suggested by SEC Chairman Gensler.
Rialto Markets CEO and Co-Founder Shari Noonan said: “Allowing retail and accredited investors the opportunity to participate in early-stage high growth private company investments, along with digital assets, is the aim of our ATS platform, unlocking more potential from the underexploited private securities market.
“Our ATS is essential to creating greater opportunities for investors, plus capital raising avenues for high growth private securities, and I’m excited to see this bright new future.“
Noonan also recently won the prestigious 2022 Markets Choice Positive Change Visionary Award, which honours Instinet co-founder Jerome Pustilnik.
Rialto Markets currently has a pipeline of signed contracts with exciting private companies more than $1 billion and is actively raising $250 million for 25 high growth private companies.