OTC Market: description, problems, solutions
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Today, there are many problems in the over-the-counter market, the most important of which are the trust of one party to the other, confidentiality, and a big amount of intermediaries.
Trust is a key to any major transaction, and the over-the-counter market is designed especially for large volumes. Intermediaries often distort valid information, which makes the whole process more complicated. Direct sellers are afraid to disclose their data to second-hand users, so high confidentiality is required when sharing personal information.
The largest dealers conduct transactions, seeking the assistance of third parties — the guarantors. Such persons are often legal companies providing escrow services. Escrow agents are the largest suppliers and buyers, as such services are required with very high-volume transactions. The agent’s role is to store the transferred objects until all the terms of the contract are fulfilled.
Of course, there are relatively trusted services in the form of marketplaces for over-the-counter trading on large stock exchanges (OTC Desk) and a service in wealthy law firms, but it is almost impossible for volume sellers to sell a product in the required time frame at a single price if this product can be shared. In addition, on the exchange services there is no complete legal support for a client, including documentary, which affects the AML-safety and quality of the process. It is worth mentioning that the fees of such services are 2–5%, what is very expensive.
Traditional methods of the transaction “through intermediaries” no longer work. Brokers spend a lot of time looking for a suitable client. In this procedure, transactions, the confidential data of each participant is available to everyone, and can also be changed by someone, what undermines the accuracy of the data of the people participating in the chain. Lawyers accompanying such transactions cannot be checked for competence in advance. Thus, this method is the most unprotected and outdated for OTC trading.
Now, with the implementation of Barter: smartplace, the largest market deals are confidential and secure. Advanced technologies which are used in the development of the Barter platform, allow you to trust each participant in the ecosystem, increase the confidentiality of important data and speed of exchange process.
Legal smart contract with an electronic signature allows you to achieve high reliability and service convenience. Commission fees for barter may not exceed 0.02% of the total transaction amount.
At first finance were tokenized, and now jurisprudence is. ©
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