TECHNOLOGY

Nasdaq and SEB to build blockchain platform for mutual funds

The aim of the project is to increase efficiencies in processing purchases and sales of fund units.

By Joe Parsons joe.parsons@strategic-i.com September 27, 2017 1:53 PM GMT

Nasdaq and Nordic financial services group SEB will build a new mutual fund trading platform based on blockchain technology.

There is currently no central market infrastructure in Sweden to handle the administration of purchases and sales of fund units, in which transactions are handled through an intermediary or directly with each executing party.

The aim of the project is to increase efficiencies in processing purchases and sales of fund units and to create a unit ledger to replace manual and paper driven processes.

“By leveraging blockchain technology there is strong potential for improvement via digitalization that can reduce manual work, create a faster process and reduce the risk for errors,” said Magnus Haglind, head of product management, market technology, Nasdaq.

“This development will look to benefit the fund market and, in the end, also the individual investors through faster response from purchases and sales.”

The project will enable various market participants to subscribe to a private blockchain, and register transactions in real-time through a distributed database.

As well as Nasdaq, fund transaction network Calastone said in June that it has successfully completed the first phase of a proof of concept blockchain for the settlement and trading of mutual funds.