Six Japanese companies have announced the establishment of the Japan Security Token Offering (STO) Association, effective today, according to a press release from financial giant Monex. Alongside with Monex, the STO Association founding members include Rakuten Securities, Kabu.kom Securities, Nomura Securities, Daiwa Securities and SBI Securities.
The founding members share the belief that the development of STOs (security token offerings) will “contribute to a more active capital market and development of the real economy” and aim to “consolidate expertise on securities businesses.” The announcement highlights the differences between ICO and STO models, noting that in the STO model the issued security tokens are recognized under the law:
“Unlike initial coin offerings (“ICO”), which has experienced some fraudulent cases, issuance and trading of security tokens are legally recognized and prescribed”.
The organization will primarily work “to develop self-regulations regarding security token offerings (STO)…with an aim of the healthy development of STO fund-raising model”. In the future the organization aims to become a fully recognized self-regulatory body:
“The association is planning to obtain certification as an Authorized Financial Instruments Firms Association based on the Financial Instruments and Exchange Act and to fully leverage its capabilities as a self-regulatory organization”.
The association will establish its headquarters in Tokyo under the management of chairman Yoshitaka Kitao, representative director and chairman of SBI Securities and executive at Ripple Labs.
The trend of building associations around compliance issues is picking up in the blockchain industry. Recently eight companies, including Coinbase and Kraken, have joined forces to form the first system to rate crypto assets on their likelihood to “be classified as a security under the U.S. federal securities laws.”