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zeekayandHanzo Dev
70f6883235
A July commit removed eight papers on the premise "no license — DEX/non-custodial only". That premise is wrong: Lux operates an ATS, a broker-dealer, a transfer agent and a bank, and this material is resold at lux.financial. The merge that brought main in preserved the removal because the commit stated a reason, which is how a stale reason outlives the fact it rested on. Back, at the versions main carried — main never received the removal, so its copies are the later ones: the ATS architecture, the security-token standard, smart order routing, institutional custody, MPC custody, post-quantum securities, the SSB partnership and the CoinBridge brief. 83 files. Co-authored-by: Hanzo Dev <[email protected]>
34 lines
2.0 KiB
TeX
34 lines
2.0 KiB
TeX
\section{Regulatory Framework}
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\label{sec:regulatory}
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\subsection{ATS Registration (Regulation ATS)}
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An Alternative Trading System under SEC Rule 300(a) is any organization that constitutes, maintains, or provides a marketplace for bringing together purchasers and sellers of securities. The Lux ATS registers on Form ATS-N with the SEC and operates under the following obligations:
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\begin{enumerate}[nosep]
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\item \textbf{Fair access}: Any qualified investor meeting accreditation and KYC/AML requirements may trade.
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\item \textbf{Order display}: Orders above applicable thresholds are displayed to all subscribers.
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\item \textbf{Best execution}: The smart order router satisfies Regulation NMS best execution obligations \cite{lux-smart-order-routing}.
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\item \textbf{Record keeping}: All orders, executions, and cancellations are logged immutably on-chain.
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\item \textbf{System integrity}: The platform maintains business continuity and disaster recovery per Regulation SCI.
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\end{enumerate}
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\subsection{Broker-Dealer Registration}
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The operating entity registers as a broker-dealer under Section 15 of the Securities Exchange Act of 1934. This registration carries obligations for:
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\begin{itemize}[nosep]
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\item Net capital requirements (Rule 15c3-1)
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\item Customer protection (Rule 15c3-3)
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\item Anti-money laundering compliance (Bank Secrecy Act, USA PATRIOT Act)
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\item Books and records (Rules 17a-3, 17a-4)
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\item Supervision (FINRA Rules 3110, 3120)
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\end{itemize}
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The non-custodial architecture satisfies Rule 15c3-3 in a novel manner: because the platform never holds customer securities or funds (all assets remain in MPC-custodied wallets controlled by the investor), the customer protection rule's possession-or-control requirements are satisfied by the investor's own cryptographic control.
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\subsection{Transfer Agent Registration}
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The platform operates as a registered transfer agent under Section 17A of the Securities Exchange Act. Transfer agent obligations and their on-chain implementations are described in the companion paper \cite{lux-transfer-agent}.
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