TORONTO, Jan. 22, 2019 /PRNewswire/ - Digital Markets ATS Inc. ("Digital Markets ATS") and 4C Clearing Corporation ("4C") today announced their plans to launch a complete end to end digital asset alternative trading system, clearing, settlement and custody platform specifically targeted at the regulated investment dealer market.
Trading digital assets today is dominated by retail focused crypto-exchanges which lack institutional-grade protections and infrastructure. In order for institutions to be able to trade this new asset class, an entirely different solution needs to be put in place. Our solution is 100 per cent focused on providing regulated investment dealers with the ability to trade, clear, settle and custody digital assets for themselves and their clients in a safe and secure manner. In addition, the ATS and 4C will provide investment dealers with a significant cost advantage versus current crypto-currency "exchanges", paving the way for institutional involvement in the digital asset space.
The ATS and 4C plan to apply to the Ontario Securities Commission (OSC) and the Investment Industry Regulatory Organization of Canada (IIROC) in early 2019 for:
- The ATS to be registered by the OSC as an investment dealer (and alternative trading system) and to become an IIROC dealer member and marketplace member, with the ability to trade both crypto-currencies such as Bitcoin and tokens issued through securities token offerings (STOs); and
- 4C to be recognized by the OSC as either an exempt clearing agency or as a clearing agency, authorized to clear, settle and custody both crypto-currencies such as Bitcoin and STOs.
Founded by a team of capital markets executives who are accustomed to working in the highly regulated financial system, the ATS and 4C platform has been built from the ground up to meet the stringent operational and compliance expectations of regulated institutions.
The ATS will be a digital asset marketplace which utilizes an institutional level matching engine that allows investment dealers to trade digital assets in the same way that they currently trade equities. This seamless integration with existing workflow will allow dealers to quickly add eligible digital assets to their existing trading platforms for both retail and institutional clients. The result of our solution is that the retail investing public will now be able to use their existing brokerage accounts with participating investment dealers to trade eligible digital assets without the need to move funds out to unregulated entities. This will for the first time allow retail clients to hold eligible digital currencies such as Bitcoin, and approved STOs, in the same account as stocks, bonds, ETFs and mutual funds. We intend to discuss with IIROC and the OSC regarding how market surveillance will be conducted. We anticipate that non-Canadian broker-dealers will be able to participate on behalf of their non-Canadian clients and themselves in the ATS via their traditional securities industry international inter-connections.
4C Clearing Corporation will provide clearing, settlement and custody services for digital assets to regulated investment dealers. Custody of digital assets has been a major issue slowing the adoption of digital currencies with regulated investment dealers and institutions. This solution will give the investment community the ability to custody digital assets much like they do today in the regulated securities market. In the digital asset space, having a custody solution that does not touch the public Internet and has a secure cold storage component will give clients of 4C the safety and security they demand. 4C's solution also avoids the costly electricity charges and adverse environmental impact of other blockchain technologies.
"We are very excited to be able to launch these innovative digital asset platforms. The support and positive momentum we have experienced from the regulated investment dealer community has propelled this project forward. This announcement marks the beginning of a new era in the digital asset space. Providing regulated investment dealers with a safe and secure platform to get involved in the digital asset market, and with proper market surveillance, will allow their customers to have trust and confidence in their digital asset transactions in a way that is not currently available in the marketplace", remarked Laurence Rose, Co-Founder, President and Chief Executive Officer of Digital Markets ATS and 4C. "We are looking forward to executing our first transactions in Q4 2019 or early 2020", concluded Mr. Rose.
The receipt of registrations from the OSC and IIROC is subject to regulatory approval.
Stikeman Elliott LLP is acting as legal counsel to Digital Markets ATS and 4C, a major accounting firm is in the process of being engaged to provide assurance services and Aon is providing insurance brokerage services.
About Digital Markets ATS Inc.
Digital Markets ATS Inc. will be the world's first alternative trading system for digital assets specifically designed for regulated investment dealers. The system will leverage the same high-performance technology platform that investment dealers are using today to trade equities. It will be easily integrated into existing order management systems and will use industry standard connectivity and messaging tools such as FIX protocol. The system will not be open to the Internet and will have to be connected to via existing private communication lines. The system is built and available for testing today. To inquire about becoming a participant on the system, please email email@example.com.
About 4C Clearing Corporation
4C Clearing Corporation will provide clearing, settlement and custody services for digital assets to regulated investment dealers and other market participants. 4C will act as a central clearing counterparty for all transactions conducted by its members via any connected approved marketplace, including the ATS. 4C will support daily net settlement for digital assets, a capital efficient and unique offering in the digital asset space. 4C will also provide a safe and secure cold storage custody platform for digital assets, which has been designed specifically for the regulated investment dealer market to have trust and confidence in their digital asset holdings for their own account and those of their clients. To inquire about becoming a Clearing Member of 4C Clearing Corporation, please email info@4Cclearing.ca.
SOURCE Digital Markets ATS Inc.