TokenSoft, a platform for issuing blockchain-based tokens, lately introduced support to registered investment companies under the 1940 Act including ’40 Act Funds.
A ’40 Act fund is a pooled investment vehicle offered by a registered investment company.
The Investment Company Act of 1940 is an important regulation for the average investor. It provides necessary oversight, checks, and balances, and requirements for hedge funds, mutual funds and other investment vehicles.
Support for registered ’40 Act Funds includes:
- Ongoing offering and token issuance support for open-ended funds
- Quarterly or semi-annual redemption periods for token holders
- Support for Transfer Agents
- Dividend support for cash-flow generating funds
Arca Use-Case
Arca, an institutional digital asset firm, recently launched a tokenized US Treasury Fund (UST), which is a ’40 Act Fund pending SEC approval. Their UST token will represent an interest in the fund composed primarily of treasuries as a low volatility investment alternative to stablecoins.
“TokenSoft’s ability to support our needs in building a ’40 Act compliant token offering was the main reason we chose them to partner with our registered fund offering. They understand the unique needs the ArCoin US Treasury Token has as an open-ended fund with on-going issuances and redemptions, and have been very helpful in our registration process.”
– Jerald David, President of Arca Capital Management Investment Firm
Investors passing Know Your Customer and Anti-Money Laundering (KYC/AML) are added to an approved holders whitelist for UST, which is on the ERC-1404 open source security token standard. This is unique for registered offerings, which do not need to limit sales to only to accredited investors.
“Adding support for registered ’40 Act Funds like Arca brings together a lot of tools we have built into one offering from on-going issuances and dividend support to integrations with transfer agents.”
– Mason Borda CEO of TokenSoft
