The Secondary Market ATS

Speakers

Oscar Jofre

CEO and Co-Founder

KoreConX

Oscar Jofre

CEO and Co-Founder

Oscar is currently one of the Top 10 Global Thought Leaders in Equity Crowdfunding, a Top 5 Fintech Influencer, Top 10 Blockchain and a Top 50 InsureTech. He has published an eBook that has been downloaded in over 20 countries, and been distributed by partners worldwide. Oscar is a featured speaker on Fintech, regulated, equity crowdfunding, compliance, shareholder management, investor relations, and transparency in the USA, Australia, UK, Germany, France, Netherlands, Canada, Singapore, Indonesia and China. He speaks to audiences covering alternative finance, RegTech, insurance, banking, legal, and crowdfunding. Oscar also advises the world’s leading research, accounting, law firms and insurance companies on the impact Fintech, RegTech, LegalTech, InsurTech and OrgTech is having in their business.

Dr. Kiran Garimella

Chief Scientist & CTO

KoreConX

Dr. Kiran Garimella

Chief Scientist & CTO

Kiran Garimella, Ph.D., is the chief scientist and chief technology officer at KoreConX, leading the strategy and development of blockchain and machine learning solutions. A sought after speaker and author, Kiran has more than 25 years experience in information technology, consulting and financial services. Previously, Kiran held roles such as global CIO and chief architect at a General Electric company and vice president and chief evangelist for BPM at Software AG. He is also an advisor to the Alliance of Merger & Acquisition Advisors and the MidMarket Alliance, principal founder of iKnowCentral and co-founder of CognitiveWorld.com.

Lee Saba

Head of Market Structure

Rialto Markets

Lee Saba

Head of Market Structure

Lee Saba brings more than 20 years of experience in the financial services industry. Prior to joining Rialto as Head of Market Structure, Lee was Managing Director and Principal at Wellington Management where he was responsible for proprietary and third party multi-asset electronic trading and connectivity infrastructure. For over 17 years, Lee led and contributed to industry standards on a variety of concepts including FIX post-trade for equities, futures and FX, execution venue normalization, risk mitigation symbology and electronic trading risk controls. While at Wellington, Lee headed the inaugural IT FinTech Working Group and was a vocal advocate of the investor hub for blockchain and digital assets research. Lee currently serves as the co-chair for the FIX Trading Community (https://www.fixtrading.org) consisting of 290+ members worldwide and is also an active steering committee member for Northeastern University’s D’Amore-McKim School of Business FinTech Initiative.

Bob Yostpille

Chief Administrative Officer

OASIS Pro Markets

Bob Yostpille

Chief Administrative Officer

Bob serves as Head of Administration of Oasis Pro Markets. He has over 25 years of capital markets experience at Credit Suisse, Bank of America, and Royal Bank of Canada. He has deep knowledge of front-to-back processes across Fixed Income and Equities products and has served as COO and Controller for front-office business units and support organizations, including technology divisions.

Oscar Jofre  00:00

All right. Good afternoon, everyone. And we are down to the finale. Yes, you made it. Whoa, I know it’s been, I want to thank everybody that stayed all the way down to the end. And we’re so appreciative. But you know, we save the best to the last, right? The secondary market trading. And we started it early as well, so it gives them a little bit more time. So you can listen to the new evolution of the private market. This is how you are going to inspire those investors to you now have something different to add to that equation, your exit isn’t just being acquired or going public. Now, you can say your securities can trade on a registered secondary ATS. And I’m going to let Kiran Garimella, our chief scientist and Technology Officer KoreConX. Lead us off, Kiran, it’s all yours.

Dr. Kiran Garimella  00:56

Thank you, Oscar. Well, as Oscar mentioned, we are at the tail end of this session, but I don’t know why they call it the tail end. I mean, this is the real beginning of the journey. And we always think about secondary markets. And I think I personally think that the moniker secondary market for something like this, really should be called the primary market, everything else is sort of secondary to what happens now, right? Because this is where the real fun begins. It’s like you’re born, nine months of labor, right? But after that, you’re got your whole life ahead of you. So most of the time that securities will spend is very little on the issuance side force, and we have to get it right, very compliant, and everything else. But once you’re done with that, then what right I mean, this is kind of where we see a lot of exciting things happen. So I’m the Chief Scientist and CTO for KoreConX. And I’ve been in the space of, you know, financial, you know, securities and in the financial industry for many, many years. And I would like to welcome our speakers, I would turn it over to each of them and say, you know, please introduce yourself, you know, briefly, and then we’ll get started. So maybe start with you, Lee.

Lee Saba  02:05

Great, hey, thank you, Kiran. I’m Lee Saba I’m head of market structure for Rialto Markets. We are a broker-dealer. And we run a secondary trading platform, also known as an alternative trading system, which is sec and FINRA registered. My background is traditionally been in financial services, prior to reality, which I’ve been here for two and a half years now, which is going by quite quickly. But previous to Rialto, I spent approximately the last 18 years at Wellington Management overseeing their electronic trading infrastructure. And, you know, I like to say I’ve done the Boston Trifecta where, you know, between Wellington, State Street, and fidelity, I’ve got the Boston financial services covered, I think. So thanks. Thanks, Kiran.

Dr. Kiran Garimella  02:57

All right. Hey, that’s awesome, Bob.

Bob Yostpille  02:59

Sure. Bob Yostpille, the head of administration here at OASIS Pro Markets. We are an ATS that’s approved to trade digital securities for digital cash. It’s a multi-asset platform. I joined the firm in January of this year prior to this, I spent 20 years at Credit Suisse in a variety of capital markets and investment banking roles, then moved over to Bank of America and the Royal Bank of Canada, where I helped manage fixed income trading technology.

Dr. Kiran Garimella  03:34

Awesome, awesome. Richard. I don’t know if we have Richard or not, there seems to be some spinning connection issue there. But we’ll wait for you know, anyone else to join? I want to get your opinion on something. You all have, you know, so much experience. And Lee, we’ve talked quite a bit about stuff like this. And Bob, you know, it’s you have tremendous experience in this space over a number of years, right. And for most people in the space, our experience has really been in the public markets, because they’re the most visible, most sophisticated, and newsworthy all the time. Right. Now, the theme of this entire KoreSummit has been the debt dream. And I am excited because I have to believe that we are at this juncture right now, a nexus point when what happened over the last 100 years in the public markets is now happening in these private markets. What’s your sense? I mean, do you carry that same sense of excitement? Do you feel that?

Lee Saba  04:48

Sure. I could start Bob if you’re okay. Yeah, I think it’s fascinating, you know, and I think this is just a natural extension of, you know, markets evolution. I mean, you know, some of the stats that you guys have put out at KCX. And I know, you know, Rialto and I’m sure OASIS has as well, um, you know, there are approximately 30 million private companies in the United States alone. Right. And, you know, they’re inaccessible, for the most part to investors. I mean, if you look at the public markets, you know, these days,  there’s just a straight decline, you know, heading, you know, straight south, as far as folks going to those listings. So, you know, now, now that you can actually get exposure to these private markets, it’s absolutely fantastic. And, you know, especially as a retail investor, because, you know, prior to 2012, it was illegal, as a nonaccredited investor to touch any of these assets. I mean, you could not get into early-stage Uber, you could not get into early-stage, Amazon, or whatever, and really, you know, hopefully, take advantage of those profits. Um, that, to me is super exciting. But what we’re here to talk about, I think, is the next step, right, you know, step one is that it’s a two-step dance, because now you actually have a secondary trading platform. Which, again, you know, we can, you know, there’s an on-ramp and an off-ramp, you know, now for private markets. And I think it’s super exciting. And I think, you know, these are, and I’ve heard our CEO says, you know, a few times, like, you know, the private markets are kind of the new public markets in a way, right, because, you know, you now have, you know, access to them. And, you know, I think it’s just going to be, you know, obviously, there are new market structures involved. But, but we’ve learned a lot in the, in the previous markets, and I think it’s just, you know, we’re gonna leapfrog we’re gonna, we’re gonna take a lot of what we learned in the public markets, apply them here with the new twists. And I think the world’s going to be a very different place in the not too distant future.

Bob Yostpille  06:55

Yeah, I mean, I completely agree with you, Lee. You know, I think, you know, private securities have always traded by appointment. And if you offer a marketplace where people can buy and sell them, and create liquidity, it’s only good for investors, but it’s good for the issuers as well. You know, I think, what you’re seeing in the public markets now, and you see some very kind of, in my view, frothy markets, how much upside is really there. And if you’re giving kind of, you know, retail investors, certain individual accredited investors an opportunity to find what some people call unicorns kind of in their early stage and opportunities to invest. I think you’re, you know, you can see a lot more upside in the private market than you can in the public market right now.

Dr. Kiran Garimella  07:46

You know, one interesting point about the public markets is the fact that many of the trades that actually occur in the, in the secondary markets and public side are basically, you know, large program trading, right, huge block sizes, and large program trading and so on. And I’m just kind of curious, your opinion on what trading actually means, in the private markets? I mean, you have, you know, you don’t have that much of, you know, volatility or liquidity. But the markets are there. Do you feel that in the private markets, in private companies, shareholders will feel a lot more connected to the market, to their companies, and have more loyalty? And you know, you know, be much more personally involved, and exploring various types of opportunities to trade in this markets versus, you know, it’s just simply nothing but a number on a chart, and you’re just simply trading it somehow. Right? What’s your sense of that?

Bob Yostpille  08:48

I think, you know, in the private markets, especially, you know, when it comes to individual investors you have in the public markets, you’re up against, as you indicated, big program traders, do you really stand at you, you get out of a trade as quickly as somebody who’s running some algo program somewhere? You know, you may blink your eyes, and suddenly, you’re trying to figure out what just happened to your portfolio, your particular position? I think in the private markets, you know, there’s no opportunity right now that I’m not aware of anybody who’s thinking about creating kind of these algo programs. Algorithmic trading models to take advantage of, you know, small movements in the price of a security. I don’t think that’s going to be the nature of the private markets. I don’t know. I don’t know if Lee has a similar view on that. But that that’s my view.

Lee Saba  09:41

Yeah, I think the algos would be a ways out, you know, the HFT the high frequency trading I don’t see any, you know, ARB trading or anything like that coming in the future. But I mean, at some point in future, who knows? But um, yeah, I think there is a direct affiliation to answer your question Kiran, or at least, it seems like it, you know, where, if you if you’re investing in a private company, you’re probably already familiar with that private company, or you’ve done some research proactively right now, and there does seem to be this nice synergy, where, you know, they’re loyal to the company in a way and the company’s loyal to them. And, you know, they, you know, sometimes, you know, like, with the tokenization of things, and, you know, the way thing people are thinking about these, these security show, you might get, you know, just extra, you know, newsletters or access to an event or whatever, because you are assuming, and it keeps it very, very, very cozy, I guess, you know, unlike, you know, and again, I’m not picking on IBM, but if you bought an IBM share, it’s like, okay, you know, that nobody reaches out and says, Thanks, welcome to the party. So I think that that is very good. Um, and I think there’s going to be more of that to come, I think, I think there is there are going to be more of these allegiance style, um, you know, you know, invest in us, and help us help you and will help you, you know, with your portfolio, and it’s, um, I think, I think it’s really nice to see, it’s, it’s pretty good, you can invest with your heart. Yeah,

Bob Yostpille  11:17

I witnessed that kind of firsthand earlier this week, I’m sorry to say it was Miami Beach only for two days, 75 degrees and sunny back here in Connecticut, now New England. But at a family office conference, where there were some companies who were doing their second or third round of fundraising, and having chats with my investors, as they would call, and, you know, close one on one conversation, where people we are on a first name basis with the CEO or the CFO. And, and it’s great to see there is a connection there.

Dr. Kiran Garimella  11:57

You know, the the very first securities transaction, it was way back in, I believe it’s 1983, or 84. And it was actually a paper certificate, I had to actually go get a paper certificate, right, just like it was a well, that’s me. And, of course, I sold it after, you know, one week and got a handsome profit out of that one. But since then, I’ve never seen a paper certificate so far. Right? And, you know, I’m just kind of curious about, you know, your take on this, there’s a lot of these, you know, e-certificate and digital securities now. And for anything that sort of in a bunch of electrons running around versus a piece of paper, there’s always going to be some angst around, you know, how real is this? Right? How much can I really trust this? And, you know, Lee, we talked in the past, you know, we know, we have been having these conversations for, you know, many, many months and years, in fact, going back and saying, How can we really use technology to foster that particular trust? How do you build an infrastructure of trust? Right, so I’m kind of curious about, you know, the journey of how we went from paper trading to paperless eCerts and down into digital securities? And, you know, I will I believe we’re actually ready, you know, we have been doing a lot of innovative works in, you know, the blockchain space, all of us as a collective team, but kind of curious to see, what is the general perception of the traditional investors, not the millennials, not the crypto people, but the traditional investors, the people who have real money on their perception about digital securities and what it means.

Lee Saba  13:34

Yeah, you know, I mean, obviously, traditionally, it that it’s been, you know, settled security settled at the DTCC, you know, the Depository Trust and Clearing Corp, you know, one central location, obviously, private securities are much different. Right, as you know, Kiran, effectively the new versions of the DTCC. Right, you are part of the trust alliance here, right. So, you know, once they’re digital securities, or once they’re just securities in general in the private placement realm, you know, we need a lot of different folks in the middle of this, right, we need, you know, broker-dealers, we need transfer agents, we need, you know, the ATSs the secondary markets, and all of them are regulated, you know, they’re all report up to the same on the same folks. And, you know, you have to play by a certain amount of rules. This is these are not ICOs. These are not these are regulated securities, we’re not talking about, you know, fly by night, things are just like, give us your money and your wallet address, and we’ll show you some stable coins and, you know, don’t worry, trust us. We’re good guys. It’s, you know, it’s a regulated environment. And, again, it’s new, it’s a much newer environment, but it’s we’re in the I would, you know, in an extra-inning baseball game, I would say we’re probably, you know, just taking the field.

Bob Yostpille  15:05

Yeah, I think that’s probably right, Lee. I’m sorry to say that I was around back in the late 80s. And they are actually runners on Wall Street who were moving certificates from building to building. Right. And then we evolved into, you know, something called the Bloomberg terminal, which was, you know, amazing. And then, as technology advanced, you know, all trading really is electronic. And I think most investors would agree with that because they could log on to their fidelity account and make a trade and it will appear in their account at we don’t have a paper certificate. So, you know, in I think, in many people’s mind, they would say, Well, don’t we already have digital securities? And I think in some sense, you do. The difference, I think there’s just the tokenized concept, and the ability to settle it up, you know, very quickly on a blockchain. But I think people generally understand the electronic nature of digital security because they’ve seen it for the last 20 years, 15 or 20 years. And security tokens, I think a lot of them are just viewed as the next generation. So I don’t see a lot of hesitancy and I don’t see some concern. People do talk about hacking and hacking wallets. But when you can assure them that their tokens that have been stolen, can be burned, and destroyed, new tokens be re you know, or reissued. That gives a lot of comfort to anybody who might be hesitant about participating in these markets. Yeah, and

Dr. Kiran Garimella  16:43

I think many of the people who are seriously concerned about the safety and security of their tokens might have had bad experiences in the cryptocurrencies space where, you know, I mean, those are, you know, sort of bearer instruments that you own it, you have it, and you’re done with it. Right, securities are nonbearer instruments, and, you know, many people don’t, you know, quite understand that particular distinction. And, you know, everything we talked about, in this whole KoreSummit, and previous core summits have always been about compliance and safety and security of transactions and allowing, you know, good players and good actors to be on the networks, right. So I mean, I think all of those go hand in hand, and, but in terms of just going to investors, and going to issuers, and companies and assure them that all of that infrastructure have mechanisms for ensuring compliance, safety, security, recourse recovery, in case of losses, right, all those things are actually in place. Now, I know that in place, because, you know, we have been [uncertain] some of these things, you know, and Lee knows this, and you know, many of other colleagues also know this. So we [uncertain] it, but what, how would we continue to educate people that the infrastructure exists? I mean, this is not a five-year forward-thinking plan, it is here now. Right, and it is quite ripe for, you know, taking this into account. So, what’s your sense of that, Bob?

Bob Yostpille  18:17

Well, you know, I think it’s interesting, you know, in this new world, that we’re in safety and security is, is, you know, paramount to anything, everything that we do is online. And it’s interesting in my mind that for Bitcoin, you’ve got a password that if you lose, it’s kind of gone forever. Is that, you know, safe and secure? I mean, you tell me, that’s a different version of safe and secure, right. So I think safety and security are something that everybody has in their mind. Cyber security is the thing that will keep us awake as we launch keeps, keeps a lot of people away coming from the Big bank. So I was always aware of issues around cyber and hacking, you know, that they no longer have USB ports on your, on your personal computer under your desk, right? They were disabled, nobody was allowed to plugin. So

Lee Saba  19:25

Yeah, I think there’s definitely a comfort factor that people need to get used to, especially if they’re in the traditional, you know, financial service realm. But you know, I guess I would harken back to the early days of the internet, like I you know, I remember I had, you know, family members and friends and, you know, when online baking first showed up or a transaction online, like I’m never doing that I’m never I’m always to the bank. I would never put my information out on the internet. And it’s like, okay, we look at us now, right? You know, everything’s out there and We trust it, right. But it took a while. It just, it just took a while. But I think what’s going to happen, it’s just going to become synonymous. Like, you know, when I go to the ATM, which is actually even dating myself, I don’t even go to the ATM much anymore. But when you do, right? You, I don’t think about the database behind it, you just want your money, does it work? And you know, you’re not going go: “boys that is that Oracle behind there?” What’s going on there that cares, right? It did its function and it delivered you, you know what you’re looking for. So I think this is just a, you know, evolutionary process. And once we, you know, it gets real liftoff, and people are just, you know, pinging back and forth, they don’t even think twice about it, it’s just going to be part of the just part of the process that you just don’t even think about, you know, like, when you turn on your water, you don’t really think about all the plumbing behind it, you know,

Dr. Kiran Garimella  20:54

Exactly. Where does it all come from?

Bob Yostpille  20:57

Yeah, like you say about ATM machines. I don’t think about them anymore. And, you know, also, maybe I’m embarrassed I don’t know about Lee, but I don’t recall the last time I even tried to balance a checkbook. It just works.

Dr. Kiran Garimella  21:09

Oh, yeah, in and it was really funny, though. We use it in a way we never even want to. It’s all online now. And I’ll tell you something really funny. I was talking to my daughters the other day, and then that mid-20s now and you know, working in everything else and they had some issue with the bank account? And I said, Yeah, you know, go look it up online and or download the app. Now that you know, we want to go there, we want to talk to somebody, you know, it’s like, gotta go in the store. And I said guy no one goes into you know, banks nowadays. And, and they said no, dad, all our friends do that. It really? I don’t know. So maybe there is a counterculture movement coming on. And so you know, enough of all the Facebook and enough of all the social media, we actually need to see people. So I’m just, you know, wanted to share the anecdote with you. Yeah, it’s, it’s, it’s funny, right. But here’s, here’s the interesting part, you know, when I kind of get your pulse on this one, what is the how do you feel issuers and companies view the capability for secondary trading? If I were a, you know, I’m just gonna put myself in play devil’s advocate for a minute, as if I’m a CEO of a new company raising capital. And, you know, what’s in it for me to offer this capability to shareholders? And is it a perception that a company that actually has a secondary market is more valuable than something that’s not? So in other words, how do we educate and address this particular concern that any company may have? And maybe they don’t have? I don’t know, about the adaption of the secondary market capability?

Lee Saba  22:52

Yeah, so I, you know, I think, you know, rightfully so as an issuer, you know, you should ask a lot of questions about how the process is going to work, you know, what sort of things can happen there? Right, we talk a lot about Kiran, I know, you and I had this discussion, you know, online and offline about the concept of fluidity, right, and just making, making the path and process just, you know, glide through as opposed to just very clunky and downloading spreadsheets. And then, you know, calling your bank and transferring money and but, you know, just try to make it very seamless. So, you know, I think that they just have to be a little bit forward-thinking and give it a try. I think what happens is, you know, like, with compensation is a good example, with, you know, employee stock ownership plans, if there’s a, you know, if a company decides to never go public, and yet they’ve been compensating their employees, with, you know, the idea that they’re going to be, you know, a shareholder, you know, now you’re, you’re, you’re paper wealthy, but you have no way to realize it, so you don’t realize it, so we can provide opportunities, you know, ourselves and, you know, and Bob and his, his company can also do similar things, that is part of the part and parcel of the employee’s compensation now, so, you know, when you pay them in shares, that’s part of their net worth. And if they have a life event, if they have, you know, they’re having a child, they’re buying a house to pay off college loans, but whatever it might be, now, they have an opportunity to realize that. The other side is true, too. I think everybody always thinks it’s an off-ramp, it’s also an on-ramp for other investors. Right? So you can diversify your cap table off of the initial primary market, get a wider berth, maybe, you know, let some of those folks realize some of what they had and maybe want to get more you know, I mean, everybody’s like, Oh, they want to sell I think a lot of times you know people missed it when the rounds. Go, you know, I think we have to, I think the now In the mindset is like, Oh, I bought it out, I want to sell it. It’s like, no, maybe I bought it, I want to buy more, you know? So on different ways.

Bob Yostpille  25:09

Yeah, I think that’s right. I think a liquid investment is far more attractive than an illiquid investment. And if you have the opportunity to trade, buy more, or exit because you maybe want to diversify into a different sector of private securities, that’s, that’s terrific. I think from an issuers point of view. And we’ve said this before, but you know, especially on a fixed income, transaction, a new issue for fixed income security. You know, we see savings of 40 to 50 bips really an asset servicing costs, because you have smart contracts, that can make interest payments, really from the push button of CFO or Treasurer’s Office. And it’ll be interesting to see what happens to some of these big asset services that are out there, when digital securities really begin to take off, because I think they will kind of eliminate the need for people to you know, do the principal and interest on you know, mortgage-backed security, for example.

Dr. Kiran Garimella  26:11

Right, right. Right. You know, so in the, in the general public markets, and when companies are, you know, they generally companies who have an eye towards a public market at some point in time and IP or something, they have to do certain things behave in certain ways, and do certain things in order to be prepared for that event, the IPO event, right? And what is the what, what would you consider is equivalent kinds of steps or things that issuers and companies in the private markets need to do to be there where there’s a viable, not perhaps not immediately, but eventually, there’s a viable, secondary market out there? Are there things that they should be doing and engaging with their shareholders at the general market in a different way?

Lee Saba  27:05

Yeah, so

Bob Yostpille  27:07

Go ahead, I’m sorry.

Lee Saba  27:10

Yeah, no, I think, you know, there are things to consider about how you would engage with your shareholder base, right? Every private issuer has a slightly different liquidity profile, no, two are the same, right. And not to say that all you know, they’re the same in the public markets, either. But, you know, Apple, and, you know, Google, or probably, you know, like water, right, they’re very limited. So, you know, you can kind of get that, but if you have 500, shareholders aren’t a cap table, and you met your raise very quickly, you know, that liquidity profile is much different than a cap table that has 100,000 investors on it, you know, so you have to kind of think about, like, how many folks you have, and how diversified you want to get. Um, and, you know, and I think there are ways to do it, you can, you can be like a central limit order book, a real-time order book, or you could schedule a point in time cross, so you can aggregate liquidity at a certain time, run it through our regulated systems, and, you know, everybody’s, you know, meets at that spot at that moment, you know, within that hour, and, you know, whatever is aggregated crosses, and then you wait till the next time, right? Because, you know, it’s like, you know, two boats crossing in the night, right? If I if you have 500 shareholders, and, you know, you’re looking to get rid of your 300 shares, and, you know, there’s just not a lot of folks that can, you know, you only have 499 other folks that can cross with you, and it’s a big ocean. So, you know, why not get everybody in the boat at the same time and, and see if we can make something happen. So just, I would think about it. Just everybody’s a little bit different. Think about how you want to interact with an ATS and what the odds are for you.

Bob Yostpille  29:04

Yeah, I agree with that completely. And I think, you know, one of the interesting parts of an ATS, you know, just use Oasis as an example, you know, we have institutional investors, accredited investors, other broker-dealers, and, and now, detail, so you have a broad cross-section of investors there, some are more sophisticated than others. And I think, you know, some of the private securities are probably more sophisticated products than straightforward equities that certain retail investors are used to. So I think when you have a diverse population of participants on an ATS, I think that’s helpful as well. 

Lee Saba  29:48

I was just at a conference just the other day and there were a few folks asking me questions like, what’s it take to be private? You know, what do I need to do? What it like? And, you know, without naming names, these folks have actually raised a lot of money through the VC world. And, you know, I think they’re getting crushed a little bit. Yeah, they’re getting squeezed, they’re getting told what to do, they’re getting, you know, and, you know, they’re losing a little bit of control. And they think one of the things that were attractive to them was the fact that  we had, you can diversify your investor base pretty quickly, right? And, you know, obviously, you want some VC, your high net worth, or whatever, but you also want to, you know, spread it out a little bit. And, you know, I could see their wheels churning when it’s like, huh, like, I can raise up to $75 million every 12 months. That’s a lot of money. We’re actually doing well, and we’re fairly profitable. And we can make, we can drive the chip, as we want to hear a lot of things there that are happening. Plus, it’s just a very interesting story. And then we still have more to go before we’ve, you know, realize all the benefits here.

Dr. Kiran Garimella  31:08

Yeah, no, no, absolutely. Absolutely. But one thing I can’t help, you know, this is a dare to dream kind of a session, right? So, you know, when you’re dreaming forward, and you’re kind of looking at this stuff. Do you believe that the structure of trading going forward in the private market secondary markets? Is it a danger? Or maybe it’s a good thing to happen? When will it be a mimicking of the public markets the way they are, you know, continuous, pretty much 24/7? Or what are we going to see many other types of models kind of come up in this space? So in other words, is it just going to be the same? Same Oh, say Mo, but in the private markets? Or are we going to see something really different? Right? What do you see that?

Bob Yostpille  31:56

Yeah, I mean, that was that’s kind of the point. Both Lee and I kind of maybe agreed on earlier around, you know, this particular private market trading, I think will be more, you know, late 1980s, early 1990s type trading between, you know, just counterparties will, there’ll be, you know, algo traders and quant traders and certain kinds of probe, you know, the program trading happening, at some point, I have to believe it will come, you know, the volume of the private markets, I think, is significantly larger than actually the volume potential in the public market. So, I think that will eventually come. I don’t know if Lee has a similar view on that. But

Lee Saba  32:47

Yeah, no, I do think that the algorithmic trading will eventually show up. You know, but, you know, growing up in the algorithmic trading days, and in the early stages, you know, it took a while for that to lift off. And obviously, we’ll do a leapfrog event, because we already know, we’ve learned a lot there. But I agree, Bob, I think it’s going to be the fact that we can trade is the magic right now. I mean, the fact that you could trade private securities, just how it simply is, it is, it is awesome. It’s a huge, you know, leap in, you know, for private markets. But yeah, it’s gonna get there. I think, though, with algorithmic trading, and, you know, maybe even, you know, dare I say, HFT it, that’s a long ways out, right? You know, because even HFT folks don’t, they’re not going to dabble in this stuff, right? Because it’s not liquid enough that they can’t do latency ARB on you, they can’t, you know, put a microwave, you know, second, you know, execution, it’s just not going to happen, right? Because, again, liquidity isn’t there, it’s not the same. And they only pick their spots. When you see how they do it, they only pick a handful of names, and they just know them super well, they know all the market. And, you know, every time they just see an anomaly, it’s [uncertain], you know, they jump in. So this isn’t that market. This is, uh, you know, more of a retail-only focused market, which actually should give us some safety. Right, um, in a way it gives you some comfort.

Bob Yostpille  34:25

Right, and I think that’s, you know, I think, you know, more times than not, we’ll see human beings, you know, hitting the button to hit the bid, as opposed to machine currently for, you know, the next several years,

Lee Saba  34:38

Yeah, I think that’s my right, next several years, at least, which is great, you know, that that’s, you know, you get to you know, touch it and feel it and, you know, drop your orders and so it’s really good. And I think there’s also just one other angle to just thinking out loud was about, you know, being able to put these assets into Like an IRA or 401k, and then be able to, you know, self manage some of that, which is, you know, absolutely fantastic. So yeah,

Bob Yostpille  35:10

And would you say Lee that, you know, the, in this new world of private securities that the playing field is more level maybe for investors than it is in the public markets just with the algos and the high-frequency traders, etc?

Lee Saba  35:22

Yeah, I mean, I would say retail has the upper arm right now, by a mile. Because, you know, you’ve probably experienced this, you know, with your experience at Credit Suisse and some of the big banks, you know, they look at $75 million dollars as a rounding error. You know, it’s some of these, oh, it’s, it’s not big enough for me, whatever. Um, that’s not the case here. And, you know, I think, you know, we’re, they’re definitely going to get, you know, retail is winning, right now, if you look at, you know, how things have evolved in the public markets with the meme stocks, and any advancements in trading technology that folks are very, you know, accustomed to now before you had to go to your broker-dealer and, you know, AI Commission’s and do all these things. Now, you know, you can self-manage this, and, you know, free-trading, nothing’s ever free.

Dr. Kiran Garimella  36:20

That’s exactly right. That’s exactly right.

Lee Saba  36:22

You’re giving up something, you just don’t know what it is yet. Exactly.

Dr. Kiran Garimella  36:27

And it’s amazing. So, I mean, you know, when we think about this whole theme of this as dare to dream, right, you know, I have to share with you, you know, my dream, let’s say, by end of 2022, you know, let’s not worry about five-year plans and 10-year plans and stuff, you know, it’s like, you know, next, you know, one year 2022, what is it that I would hope I want to share with this with you and see if you also have this big vision of what you think should happen, it could happen. And you know, one of the best ways to predict the future, as Yogi Berra said, is to be the future, you know, just make it happen. Right, that’s the best way to predict that. And so I would, I would think that this whole, you know, the traditional markets, and the way they’ve been working is that there’s really not much transparency into the entire process for most rank and file investors and the people who really are the backbone of the economy, right? These are the real people, not the Wall Street people. But these are the real people. And for most of those people, this whole market and the IPOs. And you know, what’s happening, the institution, you know, all the high-frequency trading, the Denver Dave’s, so many of those things are just very mysterious. There’s no transparency, no clear understanding of what’s happening. And I have to believe, and I dare to dream, that by end of 2022, I think we’ll see, we should be seeing a change in many of the retail investors who are not the real, sophisticated investors, but they’ll say, Yes, I know, I went there, I invested it, and I can see it now. And I can trade it. Everything is very transparent. There is a lot of trust in this one, because unlike the crypto space, these entities are all regulated. But just because they’re regulated doesn’t mean that it’s bureaucratically regulated in that sense of the word, right? I mean, it’s there’s a lot of freedom, yet the safety and security I think that whole shift in that mindset is what I’m daring to dream will actually happen. I would love to kind of hear you know, you know, some of you can open up your mind and say, you know, hey, here’s my dream for 2022

Lee Saba  38:28

Sure, sure. If you don’t mind, I’ll start. Yeah, I mean, you know, dialing up the crazy is I like to call it um, you know, I think you’re I think we can look at, you know, some regulations being a little bit clearer I’m hoping on in especially in regard to some of the new digitally native blockchain Native Instruments like NFT’s non-fungible tokens. You know, I think if you, if you run those through a Howey Test, or two a lot of them will not pass. They are pretty much securities in most regards that I can see. And, you know, again, as an ATS, you know, we would welcome the opportunity to have those traded on our platform. Um, you know, I think there’s a big movement in fractionalized collectibles, you know, whether it be art or I don’t know, you know, art more, I don’t know wine, or, you know, watch collections or whatever that are of value and have been authenticated. And now you can own a piece of that and again, put it into your, you know, into your accounts. I think that’s fascinating. I think we’re gonna see a lot more of that. So, yeah, I think the future is very bright. And I think you know, the blockchain technology is actually going to enable this and at some point, I think we are going to get to an atomic landing place. Right, where, you know, the blockchain will be trusted, much like we trust the internet now to do a lot of transactions online, you know, we’ll be able to, you know, almost settle instantly. I don’t know if that’s going to be 2022.

Oscar Jofre  40:15

But yes, it will be yes, it will be.

Bob Yostpille  40:21

Quite, if I was going to dare to dream, I think I’d echo some of the sentiments around regulations and more clarity. But I’d also dare to dream about the emergence of central bank, digital currency CBDCs that are truly backed by a sovereign government to enable, you know, Blockchain transactions, I think that’s a key component to what we’re doing here at Oasis. I think it’s a key component to what’s happening, you know, across the ecosystem where you see JPMorgan coin or MasterCard has their own coin, or Facebook has their own coin. I would love to see major government powers kind of embrace that concept, and have, you know, start to issue CBDCs I think, you know, if you can get there, I mean, the trust in a digital security token, you know, would be, you know, a no brainer, right?

Oscar Jofre  41:24

Yeah, it’s, you know, listening to the three of you has been interesting, but, you know, there’s, there’s one part I think you guys kind of touched on it, but the importance of major adoption, and I read it recently in a post, which really kind of summarized it really well, we’ve made such a massive leap to bring investors together with companies, we streamlined it we removed the friction, all of it all the way through, there was just one minor oversight everyone forgot is that nobody upgraded the banks, the banks are still running. And I, you know, I see Lee’s face I see, Bobby, you all know what I’m talking about. It’s so you know, when I dare to dream, my goal? Yes, let’s keep that going. My goal to everyone right now is, if there was ever a time where we all need to work together and really work together. This is it, we need to come as one force. Because right now what’s happening is, individually, everybody’s tackling the problem. And here’s what happens when, individually, we’re not all big enough to say, hey, you only do a billion, but you bring in Bob and he goes, I got a billion you bring in Kiran and goes, I got a billion. So now it’s worth 3 billion. And what I’m trying to get at is, we’ve recently learned that there is no motivation, no motivation, by the banking sector, to do any changes to the back rails. So which means we need to innovate, and we need to find but the only way we’re going to do it is if we all work together, I am Lee knows this, because it’s been our it’s our thesis, that’s the only reason I created KoreConX, I will never be an ATS. Because I know how difficult it is. And no matter how much I learn it, even if we, you know, we can figure out interesting, it’s not where we want to be. And I don’t want to be a broker-dealer, it’s the same thing, all these roles are important. You don’t need to replace them to kind of work with them. And I think that’s the other mental set that people need to get into is that you know, we need this to happen, where at the moment if we continue to experience the banking issues, you know, secondary market is not going to explode the way we want it to. And it has such amazing potential, you know, with Blockchain there now, if we can just take it to the next day, so, thank you.

Bob Yostpille  43:51

Yeah, I think all right. Yeah, I think, you know, just trying to close up here, but to your point, and, you know, we kind of keep this written in my desk drawer, but Jamie diamond, back in the spring said, the biggest threat to the large banks, is FinTech because the large banks are kind of handcuffed by legacy, inflexible infrastructure, that will be incredibly expensive to replace. So, you know, I think, you know, the ecosystem that we’re in, where we can be nimble, where we can build technology on our own, you know, in much smaller organizations. And pivot quickly, is going to make all the difference.

Oscar Jofre  44:34

Agreed, agreed. And it’s all of us supporting that initiative, even though you may think that’s, it’s competitive it is. But ultimately, the only way we can get these other participants to open that door is they need to see that we’re big enough that collectively it’s that that’s what we need to get to I think this is where we’re gonna see every in every ATS will be successful. I firmly believe that why? Because they is at least 1000 times more private companies than there are public companies. And each one as Lee said it. I like what you said every share, or every company has a very different shareholder makeup, there are going to be companies with Reg Ds and some with a Reg Ds with Reg A and Reg CF with Reg A, there’s going to be some that are gonna have institution, there’s enough for everyone. And, you know, it’s early on. So thank you. I mean it, you guys close it off perfectly. Because, you know, to dare to dream for an entrepreneur, there’s nothing worse than having a vision of something, and being able to get through it. And then when you’re in front of investors, you know, they’re asking, Where’s my exit? where’s this going to take me, I’m in for 10, 15 years, well, you can now give them the assurance that they are not there for 10 years they’re there until they you close your financing, you can find a registered ATS and allow them to create. So with that note, we’re closing off 2021 successfully today I can officially say we broke over 100 of these KoreSummits. Thanks to you. I don’t know how we did it. But I’m gonna breathe a little bit. Thank you. 2022 is just around the corner. And I give you this promise, just like we always do, we’re going to make it better. We’re going to make it. We’re going to hear everyone’s comments and feedback. We do have a very different schedule for 2022. The first that KoreSummit is January the 26th. It will be announced very shortly. We’re going to get ahead of this so everyone can participate. Thank you again, have a fantastic year and and wishing you all the very best, and your visions and your entrepreneurial and into our ecosystem. Thank you all and for those who couldn’t make it today. You know, all our hearts are with you. You made it come true for all of us. So thank you. Cheers.

Bob Yostpille  46:58

Thank you. Thank you. Opportunity. Yep. Thank you. Have a good night. Thank you

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