Latham Advises Nivaura on its Participation in the Fourth Cohort of the FCA’s Regulatory Sandbox

Groundbreaking project to enable issuance of tokenized equity to institutional investors.

09 July 2018

Nivaura, a leading financial technology firm, will participate in the fourth cohort of the FCA’s Regulatory Sandbox alongside 20|30, a UK company building a blockchain-based platform for corporate equity issuance.

20|30’s platform will enable the primary issuance of tokenized equity to institutional investors. 20|30 will conduct the Sandbox test using Nivaura’s market infrastructure which will ensure that the equity tokens can be fully cleared and settled. The equity tokens will be distributed to institutional investors using the London Stock Exchange Group’s Turquoise platform.

Dr. Avtar Sehra, CEO and Chief Product Architect at Nivaura, commented: “This project is truly groundbreaking because it will demonstrate for the first time in a live deal that equity in a UK company can be tokenized on a blockchain infrastructure and issued to investors within a fully compliant custody, clearing and settlement system”.

Latham & Watkins is advising Nivaura on the legal and regulatory aspects of the transaction. Stuart Davis, financial regulatory senior associate, commented: “We are delighted to be advising Nivaura on this truly innovative project at the intersection of cutting-edge technology and financial regulation”.

The Regulatory Sandbox allows firms to test innovative products, services or business models in a live market environment, while ensuring that appropriate protections are in place. It is part of Innovate, an FCA initiative kicked off in 2014 to promote competition in the interest of consumers. Since its inception, Innovate has had over 1200 applications and has supported more than 500 firms. The Sandbox was a first for regulators worldwide, underlining the FCA’s commitment to innovation in financial services.

Nivaura has already executed three issuances in the FCA Sandbox as a participant in both the first and second cohorts of the programme, the only company to be involved in the first two cohorts. Earlier in the year, the company successfully registered, cleared, and settled two Principal Protected Notes (PPN) linked to the FTSE 100. In 2017, Nivaura also launched the world’s first automated bond issuance that was denominated in a cryptocurrency and cleared and settled on a public blockchain.

The Latham & Watkins team is led by financial regulatory senior associate Stuart Davis and technology transactions partner Andrew Moyle, with corporate partner James Inness and financial regulatory associate Sam Maxson.

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