Rialto Markets, a broker dealer and secondary market ATS operator, says technology and regulation will enhance crowd funding, transforming everyone’s access to financial markets.
“Its a frontier being explored by a growing number of retail investors, the men and women in the street democratizing the investment world,” said Rialto Markets, CEO Shari Noonan.
“The ATS enables private issuers to offer a regulated tool to realize early value for shareholders, without listing on a platform like the NYSE and Nasdaq.”
“We are launching the Rialto Markets Alternative Trading System (ATS) secondary market platform and note that even Nasdaq and Goldman Sachs have plans to follow our lead, testament to our vision and recognition that the revolution won’t be stopped.”
Rialto Markets launches an Alternative Trading System
Crowdfunding was enabled in the US by the Jobs Act 2012 since 2016 through growing appreciation of investment flexibility with the new Regulation A+ and Regulation CF securities status, allowing private companies to raise up to $75m or up to $5m respectively from anyone.
Citizens, high net worth accredited investors and large financial institutions can indulge.
The global crowdfunding market is expected to grow by $196.36 billion during 2021-2025, at a Compound Annual Growth Rate (CAGR) of over 15%.
Regulation CF investment in the US for 2020 smashed all records, monthly, quarterly and annually and was up 105% with over 358,000 Regulation CF retail investors during 2020.
Reg A+ is gaining good traction as research by Rialto Markets using SEC data showed that Reg A+ issuers enjoyed a 90% completion rate, raising between $5 and $25 million in capital.
“Smaller retail investors already have safe and regulated access to some of the best and most innovative private companies through crowdfunding. We are opening this up further through Rialto Market’s secondary market ATS trading platform,” Shari Noonan added.
“They can now invest in the next Tesla, Amazon or Coinbase and trade those shares on a secondary market much earlier, long before they list on a major exchange like Nasdaq.”
“Stakes can be any size. It might be cash saved for a rainy day or an inheritance they hope to grow. With shrewd investment, they may later pay off a loan or make a down payment.”
Rialto Markets eases buying and selling company shares
“There is a new investment arena around 401(k) and IRA plans, where trillions tied up may be released into crowdfunding and emerging sectors like fractionalised art investment.”
Noonan highlighted the reassurance from a secondary market ATS run by a broker dealer like Rialto Markets, with SEC regulatory and compliance experience across its senior team.
This delivers options for investing in Regulation A+ and Regulation CF private securities.
“Investors in private securities also have a government regulator in the form of the SEC looking out for them. This is a full-blown regulated trading marketplace for private securities to match any buyers to the sellers and any sellers to the buyers,” said Noonan.
“Trading shares used to be restricted to certain companies that could afford to publicly list on stock exchange platforms such as the New York Stock Exchange or Nasdaq.”
“A regulated secondary market using our ATS potentially opens the door to a marketplace and price discovery for many, many, more private companies and potential investors.”
“There are 27 million companies in the US but fewer than 1% are publicly traded at present.”
Rialto Markets’ COO Joel Steinmetz highlighted some corporate benefits too. “Rialto Markets’ secondary trading ATS will allow exclusive access to the latest and greatest private companies.”
“In planning our secondary market ATS that there was a lack of awareness in corporate America about secondary markets and hesitancy but we successfully advised and managed many companies and are talking to many more wanting to access this brave new world.”