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Equities First Holdings has selected Hong Kong-based digital asset platform OSL act as custodian for Equities Firsts’ digital assets. Long an industry leader in providing ‘non-purpose’ loans for businesses looking to raise capital against equity, Equities First had been looking for a way to expand its presence in the global digital/crypto asset market. The Indianapolis-based lender selected OSL for its outstanding capabilities in delivering digital asset services at the institutional level, and its reputation for client focus.
A subsidiary of BC Group (stock code: 863 HK), OSL is Asia’s leading digital asset trading platform. They focus on providing their global network of institutional clients with a suite of products and services geared toward the institutional client – an essential consideration in Equities First’s decision to retain them.
Why Equities First Chose OSL
For the past 18 years, Equities First’s activities have focused on their public equity portfolio. With the relationship with OSL in place, Equities First can greatly expand its footprint in the digital asset space. In addition to executing digital transactions, OSL will help the Indianapolis-based lender with its global expertise in compliance, technology, and digital security.
The expansion into the digital space comes as growth in the industry is exploding. BC Group and OSL are reporting massive growth in their digital asset operations, with revenues in the 2nd half of 2019 increasing over 1st half revenues by 386%.
OSL Securities License is “a Game-Changer”
OSL brings a vital advantage to Equities First: They recently scored a significant regulatory success, gaining approval-in-principal to its securities dealing (Type 1) and automated trading service (Type 7) license applications from the Hong Kong Securities and Futures Commission (SFC). Upon final approval, OSL will be the first formally licensed, listed, audited, and insured digital asset platform.
Hong Kong’s licensing framework is the only one among top international financial centers that fully integrates the specific requirements for digital asset platforms alongside traditional rigorous securities regulations. Thanks to this integration, OSL’s digital clients can enjoy all the protections and safeguards they receive in traditional finance. They also benefit from additional safeguards under the new regime that have been tailor-made for the emerging digital/crypto asset class.
“Licensing is a game-changer because it provides certainty and confidence to investors, unlocking massive participation as it drives the increasing use of our platform by the global institutional investor community,” said BC Group CEO Hugh Madden.
Licensing also, in turn, gives the company an essential advantage over potential competitors, says Wayne Trench, OSL’s CEO. “Digital asset market infrastructure is going through a rapid changing of the guard. Licensing frameworks in every major jurisdiction are rewarding only the strongest and most professional operators, and these firms will continue to capture market share from unlicensed players.”
OSL’s parent company, BC Group, recently made news after securing a $36 million share placement, which the company plans to use to boost its technological and compliance capabilities in the digital asset space.
About OSL
OSL offers industry-leading over-the-counter (OTC) trading primarily to institutional clients. It also provides them with access to large pools of liquidity, systematic RFQ, bespoke token services, and other trading solutions.
Their secure brokerage platform is built on proprietary technology and delivers institutional-grade access to global digital asset markets.
OSL is the industry-wide benchmark in security and anti-money-laundering compliance.
About Equities First
With twelve offices located around the world, Equities First is a global financial services company that specializes in ‘non-purpose’ lending. These loans use a portfolio of securities as collateral. However, under the terms of the loan, borrowers cannot use loan proceeds to buy or trade more securities.
These loans have several advantages for borrowers:
• They can access cash without having to sell assets.
• They don’t have to pay capital gains taxes on the proceeds.
• They continue to enjoy any appreciation, dividends, and interest payments from their portfolio, even while the loan is still outstanding.
Structurally, they are similar to margin loans from a brokerage firm. In both cases, if the value of the securities used as collateral falls below a certain point, the lenders may issue a margin call, requiring the borrower to put up more capital to pay down or secure the loan.
While margin borrowers have to keep their collateral with the lending broker, non-purpose borrowers can use multiple accounts to secure a loan.
Equities First is able to tailor loan terms to meet their clients’ specific needs. In the near future, the company plans to double its loan originations and provide access to up to $2 billion in liquidity to its worldwide clients.
Because of these advantages, and Equities’ First’s flexibility in structuring terms, these loans have become increasingly popular among businesses that seek to borrow against their equity to fund operations and expansions, cover payroll, invest in new technologies, or any other necessities.
