North Capital Investment Technology, Inc. announced that its wholly owned 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 expand beyond private securities offerings.
Grant Nelson, Managing Director and Head of Custody and Brokerage at North Capital, stated that the charter enables the company to better serve custody clients and broaden its service scope. The company plans to commence Trust Company operations in the coming months. Trust companies have become increasingly important for custody services involving both tangible and digital assets, including tokenized securities.
The company's move toward trust company formation began approximately six years ago following regulatory developments affecting digital asset custody. James P. Dowd, CEO of North Capital, referenced the Securities and Exchange Commission and FINRA Joint Staff Statement on Broker-Dealer Custody of Digital Asset Securities, which was issued several years ago and withdrawn last year. This statement had created challenges for the firm's digital strategy by effectively prohibiting 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. 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.
Dowd noted that while broker-dealers are no longer prevented from holding digital asset securities for customers, the trust company structure provides greater flexibility to address customer needs in a rapidly changing market environment. The company has been expanding its digital asset securities activities, having launched North Capital Token Services, LLC earlier this year.
North Capital Trust Company operates as a South Dakota public non-depository trust company and is not an FDIC-insured bank. The charter does not guarantee that all products or services will be available in every jurisdiction or to every customer, as offerings remain subject to applicable laws, approvals, and documentation requirements. North Capital Private Securities Corporation continues to operate as a broker-dealer registered with the SEC and member of FINRA and SIPC.
This development reflects broader industry trends toward specialized trust structures for digital asset custody, particularly as regulatory frameworks continue to evolve. The trust company model may offer advantages for institutions and investors seeking compliant custody solutions for emerging asset classes while navigating complex regulatory requirements across different account types and investment structures.
