Figure Securities has been authorized as broker dealer by the Financial Industry Regulatory Authority, with its blockchain-based system for trade given the green light by the U.S. Securities and Exchange Commission (SEC).
This means that the California-based company is now free to operate as a broker-dealer for the blockchain-based securities, with all of the necessary permissions to do so. Figure Securities foresees that it will have an effect on the wider financial sector.
Co-founder and CEO Mike Cagney described the news as a “transformational event” for the company as well as the wider industry.
“Being approved as a broker-dealer and being able to operate our [Alternative Trading System] is a transformational event for our company that will have significant impact across the financial services sector.”
The service of Figure Securities would mainly rely on the blockchain technology for cap table management, the creation of the security tokens, and would provide various services to fund managers.
Securities would be stored on the Provenance blockchain. This blockchain is specifically built to cater to the needs of the financial sectors. As of there, they can be traded or exchanged on the blockchain as required.
This also means that Figure Securities is set to serve the growing interest in the blockchain securities from different kinds of investors, including institutional investors that are very keen on blockchain securities and some other digital assets.
Figure Securities has also partnered with Provenance to offer certain digital loans via the Provenance Marketplace, providing an instant loan performance data and same-day settlement on the blockchain.
The company has previously worked with Provenance for its asset backed securitization, the first of its kind securitization, in March 2020.
Companies can offer blockchain-based securities in the U.S. with an approval from the SEC and other regulators.