How will there be "first companies that launch succesful securities" if there is no cooperation with the legal regulators? No cooperation means no first company to launch a security, means no users, which means no use for tzero's intended purpose.

"the market where investors pay in POLY to get verified and issuers pay in POLY to issue their security token"
So the investor pays the issuer and then the issuer pays the investor? What is the investor investing in? In this scheme there is no company to invest in and even if there was, the company couldn't offer POLY as a security if it's not backed by legal regulators.

Why would the legacy institutions that Polymath wants to convert be happy to do so?