Archax has been given the green light from the Financial Conduct Authority to become the first regulated digital securities exchange and custodian in the UK. It also scored another first in receiving its FCA crypto asset registration to be a fully compliant VASP (Virtual Asset Service Provider).
This FCA registration was introduced earlier this year as part of the amended Money Laundering Regulations (5MLD) and is now mandatory for all crypto asset firms.
David Lester, former Chief Strategy Officer of the London Stock Exchange Group and Advisor and Non-Executive Director at Archax, said, “In the current global economic climate, providing new, efficient ways for small and medium sized businesses to access capital is key. 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.”
Archax, which has been regulated by the FCA as an SME Growth Market, will be a primary channel for capital raising, as well as a secondary market for digital instruments to trade. The company believes that the FCA regulated exchange status will also give institutions the confidence that all the controls and processes needed and expected are in place.
The authorisation covers three key areas: MTF permissions, in order to operate the first ever regulated digital securities marketplace in London; CASS custody permissions to offer a regulated custody service for both digital assets and client cash; and brokerage permissions, to cater to the widest range of participants.
Graham Rodford, CEO at Archax, said the company has been in discussions with the FCA for a while and that the application process was “a tough journey.”
He added that the exchange which will launch later this year, will be targeted at institutions. It” has a pipeline of 35 digital issuances in place, and we are signing up global brokers and market makers ready for go-live,” he said. “This is an exciting moment for Archax and a great step in the evolution and legitimacy of digital securities globally.”
The exchange is using matching engine technology and market surveillance from Aquis, and R3’s private, permissioned Corda blockchain for post-trade, Archax can integrate into existing trading workflows and delivers instantaneous real-time settlement.
