The following article was originally published by Alea Global Group. You can read the original article on the Alea Global Group website.

Introducing Marco Polo Exchange

Marco Polo Exchange (MPX) is a FinTech services platform, and the first reg tech solution for Foreign Financial Institutions (FFIs) to compliantly access US securities markets and US institutional capital directly. MPX was launched in 2021, and today has 100+ international FFI clients from 50+ countries that offer funds, deals, research and trading services to US institutional buyers, with a strong pipeline of equal size.

We spoke to Jeremy Oades who explained more about the platform.

What is Marco Polo Exchange (MPX) and where did it come from?

The current project is a business started just over two years ago. It’s a new take on something that people have been doing for almost 10 years. This particular opportunity is a form of licensing called a 15a-6 chaperoning license; in America, it’s a rule within the aegis of the SEC (Securities and Exchange Commission) and FINRA (Financial Industry Regulatory Authority). SEC as a government organization, FINRA is a self regulatory, industry organization, but the two of them together basically oversee the compliance and regulation of all finance business in America.

The US has the largest pool of institutional capital anywhere in the world, so it’s clearly one of the favored markets everybody wants to access. But there are obviously a lot of rules and regulations about who is able to access it; how they access it; the compliance around maintaining that access, so there’s no dodgy relationships or bad money sources; the managing of individual representatives working within those organizations having to be registered and licensed and regularly updated with continuing education. And then there’s the products and services that they’re selling have to be compliant; they have to have necessary disclaimers; they have to be targeted at the right people; they have to be properly documented with all of the necessary disclosures. And then all of that needs to be updated on a very regular basis with any changes in the rules and any updates with the company themselves, or the individuals or the products, all of which means that it’s quite a lot of work to actually manage that situation.

Previously, one would have to basically engage a law firm, probably have an internal compliance officer yourself, and probably have an office in the US, probably employ local employees that are locally licensed and trained, and supported, all of which is an extremely expensive endeavor. And you would probably have to spend a lot of money on that as a front end cost, before you even start developing business in the US. And then there’s the issue of maintaining it, and keeping it current. And the liability that comes with that.

What MPX, or Marco Polo Exchange, has done is take the framework of a chaperoning broker, which traditionally has been there to provide the function to be able to bring foreign firms from overseas into America in a regulatory compliant way. And so the opportunity to do this has been around for a long time. But because of all of the costs, and because it’s a tedious process and a very detailed one and a very important one to get right, there are very few companies that have chosen to provide this full service. And the few that have, which do exist, have tended to do it in a very, very narrowly defined way that happens to suit a particular business model of their own.

What MPX has done is to create all of that as a completely open shop. So it’s done in a platform environment, where all of the activities can be performed by the foreign company from overseas. All the way from submitting the paperwork, to going through the process, to registering the individuals to doing the KYC to doing the continuing education, all of it can be done at arm’s length, but they can have a direct relationship with the end investor.

What kind of growth has MPX seen in its two years of operation?

Currently almost all of the business on the platform have been clients that have found us through the website. So we haven’t even done any external marketing. So it’s clearly a service that is in very high demand. And at the moment, only people that know about it are looking for it. So they’re exploring, they’re finding it just through its labeling on the internet. And they’re signing up. So currently we’re growing at almost 100% increase each year, which obviously is very small.

So that’s not such a dramatic number just yet. But we are doubling the number of clients each year so far. And I expect that will continue for at least another one or two years. In fact, we hope that that number will increase dramatically in the next few years, because we are currently raising money to expand and build a sales team. So we can actually do proactive sales, to get the message out there. And also to expand the team that is bringing the companies on board.

Because while the process is largely automated through the systems, because of very, very advanced, very high quality systems, they can upload all the information they require directly from where they are. So there’s no physical exchange of papers or anything needed to do it, which is a huge change from what it used to be.

With this platform having taken such a complicated process and automating it successfully, are there other ways the platform could be used to streamline similarly complex processes?

It’s in fact one of the main reasons I decided to get involved with the platform. As much as I want to help them grow, I’ve done a lot of work in the world of impact investing, and climate change, basically the UN sustainability issues, and I would very much like to see this platform used for sustainability purposes.

We have a presence through the subscribers in 50 countries already, and that’s growing rapidly. I feel quite strongly that there is a possibility to use it for things like helping create a marketplace for netzero financial products, or to a soft financing hub for SMEs. If we have already created the platform and paid for it, then we don’t need a budget to maintain it. We’ve just got to get everybody on board. So first things first, we need to get the platform up and running and successful. But that is certainly part of our phase two thinking.

More about Marco Polo Exchange

The platform centers on two complementary products:

  • MPX Passport, the first fully electronic regulatory onboarding and reporting system cuts processing time from weeks to hours, slashes costs, and provides full compliance for direct relationship development. Over 100 securities and advisory firms are already active and another 150+ in the process of onboarding. They cover over 50 countries across Europe, Canada, UK, Asia, emerging and frontier markets.
  • MPX Bridge, an AI driven marketplace for primary capital raising, where firms registered on Passport can showcase deal flow and manage transaction workflow between themselves and invited buy-side investors. The space will be curated by AI and driven by profile, preference and activity data from the investors and the platform.

Read the original article on the Alea Global Group website here.