North Capital Trust Company Secures South Dakota Charter to Expand Digital Asset Custody Services

North Capital Investment Technology, Inc. announced that its subsidiary, North Capital Trust Company, has received a Charter and Certificate of Authority from the South Dakota Division of Banking to operate as a Public Trust Company. This development positions the company to enhance services for custody clients and broaden its operational scope beyond private securities.

Grant Nelson, Managing Director and Head of Custody and Brokerage at North Capital, stated that the charter allows the company to better serve custody clients and expand services. The company plans to commence trust company operations in the coming months. Trust companies have become preferred entities for custody of both tangible and digital assets, including tokenized securities, a sector where North Capital has been actively expanding through its North Capital Token Services, LLC.

The move toward establishing a trust company began approximately six years ago, following the Securities and Exchange Commission and FINRA Joint Staff Statement on Broker-Dealer Custody of Digital Asset Securities. That statement, which was withdrawn last year, effectively prevented clearing and carrying broker-dealers from serving as custodians for digital asset securities. North Capital Private Securities Corporation, the firm’s custodial broker-dealer, had received approval as a clearing and carrying firm in 2016, making the Joint Statement a significant obstacle to the firm’s digital strategy.

Investors and registered intermediaries depend on qualified custodians to meet statutory requirements for registered investment advisors, registered funds, and qualified accounts including IRAs, ROTH IRAs, HSAs, and 401k plans. Although broker-dealers are no longer barred from holding digital asset securities for customers, North Capital believes the trust company structure offers greater flexibility to adapt to market changes. James P. Dowd, CEO of North Capital, emphasized that North Capital Trust Company will help meet evolving customer needs in a dynamic market environment.

North Capital Trust Company operates as a South Dakota public non-depository trust company and is not an FDIC-insured bank. Services will be offered in compliance with applicable laws, approvals, and documentation. North Capital Private Securities Corporation remains a broker-dealer registered with the SEC and a member of FINRA and SIPC, with more information available through FINRA BrokerCheck and on North Capital’s website.

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