The tokenized asset firm's advisory arm moved from exempt reporting to full SEC registration, clearing a hurdle for pension funds and endowments.
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Securitize Capital, the advisory arm of the tokenized asset firm, registered as an SEC investment adviser. The registration took effect July 22. The subsidiary moved from exempt reporting to full registration under the Investment Advisers Act of 1940, Securitize said.
Full registration means public disclosure of advisory activities and periodic SEC examinations. The company now holds a broker-dealer and investment adviser license across its US affiliates.
The registration clears a common due diligence hurdle. Many pension funds and endowments restrict business to advisers that are fully registered, Securitize said. Exempt reporting advisers typically manage smaller pools of capital or focus on venture capital. Full registration puts the firm in a position to scale its assets under management and meet the compliance standards institutional allocators demand.
The shift from exempt reporting to full registration is voluntary. It subjects the firm to SEC examinations of its books and advertising. Exempt reporting advisers face lighter oversight, which some institutional clients see as a risk, several people in the tokenization sector said.
CEO Carlos Domingo said the registration lets the firm work with asset managers interested in tokenized investment products. He called the registration a step toward expanding Securitize's advisory business. The company serves roughly 3,000 clients and over 1.2 million investors, the filing said.
BlackRock chose Securitize as its technology partner for tokenization initiatives, Securitize said. The registration gives Securitize the license to advise on tokenized fund allocations, not just process the transactions. The platform can structure portfolios and manage risk for institutional clients.
Tokenization platforms competing for institutional assets are building out the full regulatory infrastructure. Securitize now holds a broker-dealer and investment adviser license across its US affiliates, putting it on the same regulatory footing as traditional RIAs.
Securitize trades on the NYSE under the ticker SECZ. The registration carries CRD number 315859 and SEC number 801-136838.
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