tZERO announced that its broker-dealer subsidiary, tZERO ATS, has launched support for clearing and settlement securities transactions for itself and its broker-dealer affiliates. tZERO is a technology firm with the goal of democratizing access to private capital markets. It brings together issuers and financial firms seeking a transparent, automated, digitally enabled marketplace and investors seeking access to unique private assets, public equities, cryptocurrencies, and other digital assets, including non-fungible tokens.
With the new functionality, broker-dealer subsidiaries are able to independently onboard additional private securities at a faster pace, accelerate the settlement times of transactions on its private security trading platform, and improve the user experience in transferring cash and securities to and from third-party platforms.
tZERO interim CEO and chief legal officer Alan Konevsky said in a statement that the launch “will significantly increase the velocity at which we can onboard new assets to the tZERO ATS, giving customers a greater variety of investment opportunities and enabling increased liquidity for private capital markets.”
This clearing and custody model supports the current and future private digital securities that trade on the tZERO ATS, which are uncertificated securities with focused blockchain functionality to increase transparency. It will also support NMS securities, which are public securities that trade on national exchanges.
In addition to supporting a traditional broker-dealer custody, tZERO expects to implement parallel clearing, settlement, and custodial solutions to support digital asset securities, which are securities issued and settled on a blockchain, to its platform.
This solution will initially be implemented through user-directed settlement in partnership with a custodian and, later, in conjunction and in accordance with the Securities and Exchange Commission (SEC)’s statement that outlined how broker-dealers can engage with digital asset securities, including maintaining custody of these assets and settling on-chain without a clearing firm or a custodian.
“tZERO is committed to transforming the current trading infrastructure of digital assets to support next-generation capital markets and innovating the ways these assets can be custodied and transferred. Being able to support next-generation infrastructure and settlement and clearance systems in place today will propel operational efficiencies and bring value to both the company and its stakeholders,” Konevsky said in a statement.
Fundraising
In a separate statement, Intercontinental Exchange announced that it is making a strategic investment in tZERO. Terms are not disclosed. Other participants in tZERO’s fundraising round include Overstock.com, an original investor in tZERO, and Medici Ventures,a blockchain-focused fund whose general partner is an entity affiliated with Pelion Venture Partners, among others.
In connection with ICE’s investment in tZERO, David Goone, a longtime member of ICE’s management team and currently ICE’s chief strategy officer, will join tZERO as its next CEO and will serve on tZERO’s Board of Directors.
During his tenure at ICE, Goone developed and managed many of the company’s product lines and oversaw ICE Benchmark Administration, which has administered LIBOR and the global gold and silver fixings. He has served on many of ICE’s subsidiary exchange boards and represents ICE on several industry boards, including the Depository Trust Clearing Corporation (DTCC), Options Clearing Corporation (OCC), and the National Futures Association (NFA). Goone also served as Vice Chairman of CETIP S.A. until its merger with B3 exchange in Brazil.
“David Goone was present at many of ICE’s milestone moments and deals over two decades, a key player on our management team as we built our world-class trading, clearing and data infrastructure and product line, and has been a steward of our problem-solving culture,” said Jeff Sprecher, founder, chair and CEO of Intercontinental Exchange, in a statement. “David’s leadership and his mastery of trading, data, and clearing technology will be a big asset as tZERO begins its next chapter leading the growth and adoption of next-generation market infrastructure.”