FINRA Grants Broker-Dealer Status To Netcapital
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The United States regulator for brokerage firms and exchange markets, FINRA, has approved Netcapital as a broker-dealer.
This approval lets the company handle bigger fundraisers and offer more opportunities to investors. Netcapital Securities Inc., a part of Netcapital Inc., can now help with private securities and business referrals. It can also support equity fundraising under Regulation A and Regulation D.
The new license also lets Netcapital work with other broker-dealers to share deals, helping to create more chances for investments. This change gives businesses better ways to raise funds, especially those needing larger amounts.
Netcapital Aims To Make Private Equity Investment Easier
By working with other brokers, Netcapital can reach more people and offer bigger deals. Netcapital can now also charge fees based on the money raised, which helps its business grow.
Martin Kay, the Chief Executive Officer of Netcapital, said this approval is an important step for the company. He added that it will allow the firm to grow its services and assist clients with larger fundraising goals.
According to the company, the approval will provide investors with more private equity choices. Netcapital aims to partner with broker-dealers to offer a variety of investments and make private placements easier to access.
Netcapital also hopes to make private equity investment more accessible and improve fundraising. Its platform allows private companies to raise money online. With its broker-dealer operations, the company can offer better funding solutions.
Recently, FINRA fined Interactive Brokers $475,000 for problems in its share lending program. The company returned borrowed shares over 800 times, which caused issues in its securities records. FINRA also said an unregistered person handled software development for securities lending between 2021 and 2023, which was against the rules.
The Company’s Shares Dropped 81% This Year, With A Brief Gain To $2.88
Netcapital’s shares dropped after reporting higher losses and lower revenue in its fiscal first quarter. The stock fell 28% to $2.06 in after-hours trading on Monday, below the $2.30 low set earlier. Shares are down 81% this year, despite a brief 11% gain to $2.88 during the regular session.
The company announced a loss of $2.5 million for the quarter ending July 31, compared to about $492,000 last year. Losses per share were $5.10 with 495,000 shares outstanding, compared to $4.61 with 107,000 shares last year.
Netcapital Inc. is a financial technology company that helps private businesses raise funds online. Its platform also provides private equity options for investors.
The company’s consulting group, Netcapital Advisors, offers advice and takes equity stakes in select companies. Its funding portal, Netcapital Funding Portal, Inc., is registered with the United States Securities and Exchange Commission and is part of FINRA.
