Several platforms have attempted to meet the requirements for the STO by creating their own standards. One of the representatives of the STO is 'Polymath'.
Problems with ICO led to strong regulation. However, this brought new attention to the STO. The STO permits issuance and trading of tokens only to fully qualified issuers and participants.
For example, the first owner of token must have lock-up period of one year, and the approved counterpart must be on the whitelist in order to make a second transaction again.
The Polymath platform supports setting the conditions for issuing each securities token using the ST-20. it created its own token standard - ST-20, by adding some necessary functionality to ERC-20 standard of Ethereum.
Polymath focused on [reg-d-506-c] to set token issuance and trading terms on the platform. Therefore, the issuer will not deviate from the [reg-d-506-c] regulation, as the platform suggests.
The ST-20 standard of the Polymath platform is not much different from the standard proposal of the Ethereum ERC-1400.
The ST-20 will involve all KYC / AML identity services, legal advisors, developers, and investors with the provision of [reg-d-506-c].
