Digital capital raising platform Globacap is bringing initial coin offerings (ICOs) into the regulated arena, with what it claims is the first blockchain public equity issuance with oversight from the UK’s Financial Conduct Authority.
According to a press release, Tuesday, Globacap said the capital raising will provide proof of concept for its new platform that will help start-ups and SMEs efficiently access a significantly wider pool of global capital.
The company was one of a group selected by the FCA to participate in its regulatory sandbox, which oversees product testing in a customized regulatory environment. As part of this initiative, Globacap will perform an end-to-end capital raising on its own platform, which will involve issuing part of its own equity as an ERC-compatible token, in its Digital Security Offering.
Globacap said it has been working with legal advisors, Hogan Lovells to create a public blockchain token that forms a legal shareholding within UK company and securities law. Globacap (/GCAP) tokens are ordinary shares, it said, with token holders having the same voting and dividend entitlements as existing shareholders. Fifteen million GCAP tokens will be issued in the Digital Security Offering and investors will be required to register in order to participate.
“This is transformative to the securities industry, paving the way for small and mid-sized businesses to more efficiently access a wider pool of global capital,” said Myles Milston, CEO and co-founder of Globacap. “The Innovate team at the FCA have been pivotal in this milestone, allowing us a quicker route to launch our proof of concept while having regulatory oversight.”
Globacap intends to launch its platform later this year to facilitate digital offerings of securities, allowing businesses to raise capital globally, while managing all regulatory and compliance aspects. It said that, through the platform, investors gain access to opportunities to invest using fiat and a range of cryptocurrencies, while benefitting from more transparent valuation and post-issuance liquidity. The platform incorporates automated due diligence processes and customized checks to mitigate regulatory anti-money laundering (AML) concerns over secondary market transfers.
Automated post-issuance services include dividend distributions and coupon payments, electronic shareholder voting, investor communications, shareholder registry management and regulatory reporting.