Overstock’s security token trading platform has onboarded two additional broker-dealers to its tZERO ATS (formerly known as PRO Securities ATS), which allows their clients to trade listed digital securities. The new subscribers include ChoiceTrade and another undisclosed broker-dealer that tZERO identified as a multinational, publicly-traded investment bank and financial services company focused on institutional brokerage.
These broker-dealers join Dinosaur Financial Group and will be allowed soon to have access to tZERO’s preferred equity security (TZROP) and other assets that trade on the tZERO ATS. In addition to the three current subscribers, the SEC-registered alternative trading system said that it has in the pipeline more broker-dealers interested in trading securities.
tZERO anticipates trading more digital securities but says the addition of new assets have to carefully work through legal and financial due diligence, as well as regulatory matters to ensure that only high-quality assets trade on the tZERO ATS. Explaining the quiet pace, it further states that while many issuers are intending to trade on the tZERO ATS, they are doing so in conjunction with a new capital raise. As such, the timing for when these new securities trade depends on broader corporate strategies, the speed of the capital raise process, and regulatory considerations.
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tZero has been expanding its headcount as the firm is getting ready to sweeten its soon-to-be-launched broker-dealer arm. tZero’s anticipated retail brokerage services include sales trading, electronic execution, and portfolio execution for buy- and sell-side clients. tZERO hopes to launch its own retail broker-dealer within the coming months to grab the capacity to serve retail traders instead of only accredited investors.
“Our primary objective in partnering with Overstock on its digital dividend was to enhance liquidity on the tZERO ATS. The launch of two new broker-dealers marks an important milestone toward achieving this objective. These subscribers, together with existing agreements with other broker-dealers, will meaningfully increase the number of investors able to trade digital securities. Today’s announcement is also exciting as it will make our platform more attractive to prospective issuers,” tZERO CEO Saum Noursalehi stated.
ChoiceTrade CEO Neville Golvala added: “ChoiceTrade has been a pioneer in the online brokerage market since our founding twenty years ago. Today’s announcement illustrates our ambition to continue to innovate and influence the technological and regulatory initiatives that shape our industry. Subscribing to the tZERO ATS aligns with this mission by providing our customers with the ability to trade innovative securities, which we believe is the future of the industry.”