Harbor receives transfer agent license from SEC to help security token issuers pay out dividends

Quick Take

  • Security token platform Harbor just received a transfer agent license from the Securities and Exchange Commission (SEC) 
  • The license will enable Harbor to keep records of security token ownership and pay out dividends for security token issuers 
  • The firm hopes to attract blockchain companies looking to do a Reg A+ offering, which requires the engagement of a transfer agent
advertisement

Harbor, the firm that aims to be the “one-stop shop” for security token issuers, has inched closer to that goal after obtaining a transfer agent license from the Securities and Exchange Commission (SEC). 

Notified by the SEC on Thursday, the security token platform is now the first blockchain company to receive both a transfer agent license and a broker-dealer license, Harbor CEO Joshua Stein told The Block. 

A transfer agent helps companies keep records of their stock ownership and pay out dividends to investors. Importantly, The SEC requires companies to engage with transfer agents for Reg A+ offering, a less burdensome route to raise public funds that hold appeal to many blockchain companies, according to Stein. With the license and its blockchain native platform, Harbor is hoping to target a growing group of blockchain companies looking to conduct Reg A+, said Stein. 

However, both Blockstack and YouNow, the only two blockchain companies that have won SEC approval to conduct a Reg A+, don't think it's necessary to have a transfer agent. The two companies state in their offering circulars that their tokens are not “not currently securities” and some activities that a regular transfer agent would perform is done automatically on the blockchain. As such, since the license is meant to regulate persons that act as transfer agents for securities, Blockstack and YouNow are exempt from the requirement, according to the circulars. 

"The current rules require a transfer agent and we don't know whether or how the SEC will relax the application of that rule for token issuers in the future. I think that the more the token resembles a security, the more likely traditional securities law requirements like transfer agents will be required," said Stein. 

For Harbor, however, being a transfer agent also complements the broker-dealer license it received in September. According to Stein, the two licenses enable it to facilitate the full life cycle of security token issuance as well as regulated trading, thus strengthening its appeal to companies seeking to do security token offerings. 

“Think of the entire life cycle of this, there is… selling the investors into the investment, maintaining the investment while they are in, and controlling how they are traded. The broker-dealer is mostly involved in gaining the investors into the investment. The transfer agent maintains the records while they are in and pays out dividends, and the transfer agent controls when they pay out,” said Stein.  


© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Related Reading

Get Your Crypto
Daily Brief

Delivered daily, straight to your inbox.

Why BTG Pactual is launching a crypto platform

Brazil-based BTG Pactual, Latin America’s biggest investment bank, is launching its own crypto asset platform that will initially support bitcoin and ether trading. The platform will be called Mynt and allow customers to purchase bitcoin and ether, BTG Pactual’s Head of Digital Assets André Portilho tells The Block. Eventually, the platform will support other digital […]
Read Full Story
Sep 24, 2021, 9:17PM UTC

TRON USDC now available

Delivering on a vision for an interoperable global standard for dollar digital currency, Circle and TRON have partnered to make USD Coin (USDC) available on the TRON blockchain, which has grown to more than 56 million accounts and nearly 2.5 billion transactions since its founding just four years ago. TRON is home to a broad ecosystem for digital assets in Asia and around the world, and the TRON community can now benefit from easy access to the world's fastest-growing, regulated dollar digital currency. 
Read Full Story
Sponsored Post
More