North Capital Investment Technology, Inc. announced today that its wholly owned subsidiary, North Capital Trust Company, has received a Charter and Certificate of Authority from the South Dakota Division of Banking to operate as a Public Trust Company. This development positions the firm to better serve custody clients and broaden its services beyond private securities, particularly in the digital asset space.
Grant Nelson, Managing Director and Head of Custody and Brokerage at North Capital, expressed excitement about the charter, noting that it allows the company to commence Trust Company operations over the next few months. Trust companies have become a preferred vehicle for supporting the custody of tangible and digital assets, including tokenized securities. North Capital has been actively expanding its digital asset securities activities, having launched North Capital Token Services, LLC earlier this year.
The journey toward obtaining the trust company charter began approximately six years ago, as explained by James P. Dowd, CEO of North Capital. The firm started exploring the feasibility of forming a trust company after the Securities and Exchange Commission and FINRA issued a Joint Staff Statement on Broker-Dealer Custody of Digital Asset Securities. Under that statement, which was withdrawn last year, clearing and carrying broker-dealers were practically prohibited from serving as custodians for digital asset securities. Since North Capital's custodial broker-dealer, North Capital Private Securities Corporation, had received approval as a clearing and carrying firm in 2016, the Joint Statement was a setback for the firm's digital strategy.
Investors and registered intermediaries rely on qualified custodians to fulfill statutory requirements for registered investment advisors, registered funds, and qualified accounts such as IRAs, ROTH IRAs, HSAs, and 401k Plans. Although broker-dealers are no longer precluded from holding digital asset securities on behalf of their customers, Dowd believes that North Capital Trust Company will provide the flexibility needed to meet evolving customer demands in a rapidly changing market environment.
For more information about North Capital, visit https://www.northcapital.com.
