North Capital Investment Technology, Inc. announced that its 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 regulatory approval marks a strategic expansion for the financial technology firm, allowing it to broaden its custody services beyond private securities into the growing digital asset sector.
Grant Nelson, Managing Director and Head of Custody and Brokerage at North Capital, stated that the charter positions the company to better serve custody clients and expand its service scope. The firm plans to commence Trust Company operations in the coming months. Trust companies have become preferred entities for custody of both tangible and digital assets, including tokenized securities, which North Capital has been actively developing through its North Capital Token Services, LLC launched earlier this year.
The move toward establishing a trust company began approximately six years ago, following the Securities and Exchange Commission and FINRA Joint Staff Statement on Broker-Dealer Custody of Digital Asset Securities. According to James P. Dowd, CEO of North Capital, this statement effectively prohibited clearing and carrying broker-dealers from serving as custodians for digital asset securities. North Capital Private Securities Corporation, the firm's custodial broker-dealer, had received approval as a clearing and carrying firm in 2016, making the Joint Statement a significant obstacle to its digital strategy.
Although the Joint Statement was withdrawn last year, removing restrictions on broker-dealers holding digital asset securities, Dowd emphasized that North Capital Trust Company will provide greater flexibility to meet customer needs in a rapidly changing market. Investors and registered intermediaries depend on qualified custodians to fulfill statutory requirements for registered investment advisors, registered funds, and qualified accounts including IRAs, ROTH IRAs, HSAs, and 401k Plans.
The charter enables North Capital to offer trust company services that complement its existing brokerage operations through North Capital Private Securities Corporation, a broker-dealer registered with the SEC and member of FINRA and SIPC. More information about NCPS is available through FINRA BrokerCheck and on North Capital's website. The company notes that no regulatory agency has endorsed or recommended North Capital or its services, and that trust company services will be offered subject to applicable laws, approvals, and documentation.
