Ohanae's Odyssey: Pioneering Transformation in OTC Securities Markets
Published on December 24, 2023
Author : Greg Hauw, Founder & CEO, Ohanae, Inc

Introduction

In the ever-evolving landscape of financial markets, the emergence of tokenization is heralding a new era, particularly in the Over-The-Counter (“OTC”) securities space. The recent Bain & Company report casts a spotlight on the transformative potential of tokenization, illuminating its capacity to redefine the alternatives market. For Ohanae, a company situated at the crossroads of innovation and financial services, the opportunities presented by tokenization in OTC securities markets are not just noteworthy but potentially game-changing.

Tokenization Unveiled

At its core, tokenization involves data standardization, workflow mutualization, and process automation, as underscored by the Bain report. For Ohanae, deeply entrenched in the OTC securities world, these principles align seamlessly with their mission to redefine the management of OTC securities. Their Web3 approach for capital markets includes tokenization, equity crowdfunding, non-stop trading, and atomic settlement. Embracing tokenization allows Ohanae to streamline data management, enhancing efficiency and reducing the complexities associated with OTC transactions.

Data Management Evolution

Tokenization provides a pathway to revolutionize data management. The report emphasizes that the process involves not just standardization but also workflow mutualization and process automation. Ohanae, through its commitment to leveraging blockchain and smart contract technology, is facilitating seamless information sharing, reducing the need for manual reconciliation, and cutting through the complexities associated with OTC securities.

Unlocking Liquidity

A standout feature of tokenization, highlighted by Bain, is its potential to enhance liquidity in traditionally illiquid markets. OTC securities, by nature, can be cumbersome to trade, often requiring manual and bespoke processes. Tokenization has the power to simplify ownership records, making smaller ticket sizes economically feasible. For Ohanae, this translates to a potential paradigm shift – making illiquid investments more accessible and convertible for a broader range of investors.

Collateralization and Innovative Use Cases

Bain's report delves into collateralization, an area where only select firms currently offer loans against fund interests. Tokenization emerges as a transformative force in this domain by introducing blockchain records to prove provenance and leveraging smart contracts to enhance collateral monitoring. While this aspect may not directly align with Ohanae's current suite of solutions, it reflects the broader industry trends that could influence the landscape. The report further explores a spectrum of innovative use cases, ranging from negative screening to the programmatic rebalancing of portfolios. As Ohanae continues to evolve within the Web3 for capital markets, it remains attentive to industry developments, positioning itself to adapt and integrate emerging opportunities that align with its mission.

Automating Capital Calls and Atomic Settlement

The report underscores the transformative capability of automating capital calls, a crucial aspect in the alternative investment landscape. While this particular feature aligns with the report's insights, it's essential to note that Ohanae's Web3 approach, with a primary focus on primary and secondary offerings using deposit coins or "Ohanae Coins" pegged 1:1 to the U.S. dollar in a custodian bank (omnibus account arrangement), may not fully integrate the conventional concept of capital calls. Nevertheless, the platform's commitment to Web3 principles, including atomic settlement, streamlines transactions, reducing the reliance on manual intervention and heightening the overall investor experience.

Scalable Customization

The realm of scalable customization through smart contracts perfectly intersects with Ohanae's expertise, harmonizing with the transformative capabilities of tokenization. Ohanae's proficiency in creating discretionary model portfolios, tokenizing underlying investments, and facilitating automatic settlements positions the company as a trailblazer, poised to make these advanced capabilities accessible to a wider audience.

Tokenization's Revolutionary Impact on Alternative Investments

The report outlines a substantial revenue opportunity, estimating an annual potential of around $400 billion. This financial landscape is a compelling call to action for Ohanae, positioning the company as a leader in the OTC securities market. In the realm of OTC securities, Ohanae stands at the forefront of transformation, introducing Web3 technology to revolutionize capital markets. This innovative approach guarantees security, transparency, and regulatory compliance for investors participating in over-the-counter securities. As emphasized in the SEC’s Office of the Advocate for Small Business Capital Formation's Fiscal Year 2021 report, the private securities market, boasting a staggering $3.2 trillion issued in 2021, significantly surpasses the public securities market, underscoring the extensive influence of Ohanae.

Addressing Persistent Frictions

Tokenization, as outlined by Bain, has the potential to address persistent frictions around ease of investing, exit timelines, borrowing against holdings, and customizable portfolios. Ohanae's commitment to addressing critical issues within the OTC securities market aligns with the overarching theme of the report.

Opening Revenue Streams in Alignment with Ohanae's Mission

As we dissect the projected $400 billion revenue opportunity, it unveils a strategic roadmap for the diverse stakeholders in the industry to capitalize on this transformative wave. Fund managers, wealth managers, wholesale platforms, fund administrators, and transfer agents emerge as key beneficiaries in this evolving landscape. Yet, for Ohanae, this is not merely a revenue opportunity; it is a unique chance to assert leadership within the dynamic realm of OTC securities, aligning seamlessly with our mission to redefine and elevate the standards of the industry.

Pioneering the Way for Tokenization

The report strategically maps out multiple avenues paving the way for the widespread integration of tokenization in the realm of alternatives. Whether spearheaded by visionary fund managers, forward-thinking wealth managers, dynamic wholesale platforms, or collaborative industry consortia, the crux lies in meticulous distribution and implementation. In this landscape of transformative possibilities, Ohanae stands ready to be a trailblazer, leveraging its cutting-edge platform and steadfast commitment to Web3 technology to take a pivotal role in championing these groundbreaking initiatives in the OTC securities markets.

Pragmatic Approach

The recommendation of a pragmatic, step-by-step approach resonates with Ohanae's philosophy. Starting small, establishing proof points, and gradually scaling tokenization align with the company's ethos of innovation with a focus on real-world impact.

Industry Collaboration

The report emphasizes the need for industry collaboration and multiyear commitments to realize the full potential of tokenization. Ohanae, as a FinTech company positioned at the forefront of OTC securities, could serve as a catalyst for such collaboration, bringing together incumbent firms and emerging challengers.

Ohanae's Position in the Market

As the report concludes, it is evident that tokenization could bring about a significant shift in how alternatives operate. While it may not lead to complete democratization, it certainly has the potential to make alternatives more accessible and desirable for high-net-worth individuals. For Ohanae, this represents an opportunity not just to participate in this shift but to lead and redefine OTC securities with confidence.

Ohanae's 6-Minute Pitch

Ohanae's 6-minute pitch delivers a concise yet comprehensive insight into the company's mission, leadership, competitive advantages, revenue model, projections, and strategic fundraising initiatives. It harmoniously resonates with the key themes explored in the Bain report, establishing Ohanae as a visionary participant in the OTC securities markets.

Conclusion

In conclusion, the insights provided by the Bain report offer a robust framework for understanding the transformative potential of tokenization within the realm of alternatives. For Ohanae, this is not merely a guide; it is a dynamic blueprint for driving innovation. Positioned at the convergence of OTC securities and cutting-edge Web3 technology, the opportunities presented by tokenization are not just conceptual but tangibly within grasp. Ohanae's unwavering commitment to revolutionizing OTC securities trading perfectly aligns with the transformative capabilities underscored in the report. The prospect of heightened liquidity, streamlined operations, and augmented revenue solidifies the pivotal role Ohanae plays in shaping the future landscape of OTC securities markets. Positioned to lead as the industry progresses, Ohanae is set to redefine the paradigms of how OTC securities are traded and managed.

Bain & Company Report:

How Tokenization Can Fuel a $400 Billion Opportunity in Distributing Alternative Investments to Individuals

Disclaimer

An offering statement regarding this offering has been filed with the SEC.  The SEC has qualified that offering statement, which only means that the company may make sales of the securities described by the offering statement.  It does not mean that the SEC has approved, passed upon the merits or passed upon the accuracy or completeness of the information in the offering statement.  The offering circular that is part of that offering statement is at https://vdr.ohanae.com/projects/ohanae.  You should read the offering circular before making any investment.

Ohanae Securities LLC is a subsidiary of Ohanae, Inc. and member of FINRA/SIPC. Additional information about Ohanae Securities LLC can be found on BrokerCheck. Ohanae Securities LLC is in discussions with FINRA about exploring the expansion of business lines for the broker/dealer.  Any statements regarding abilities of Ohanae Securities LLC are subject to FINRA approval and there are no guarantees FINRA will approve the broker/dealer’s expansion.

Ohanae Securities is seeking approval to be a special purpose broker-dealer that is performing the full set of broker-dealer functions with respect to digital asset securities – including maintaining custody of these assets – in a manner that addresses the unique attributes of digital asset securities and minimizes risk to investors and other market participants. If approved, Ohanae Securities will limit its business to digital asset securities to isolate risk and having policies and procedures to, among other things, assess a given digital asset security’s distributed ledger technology and protect the private keys necessary to transfer the digital asset security.