Calastone successfully shifts funds network to DLT platform

Calastone has been engaging with a community of early adopters who have had access to the technology, including custodians and fund managers.

By Jonathan Watkins

Calastone has successfully migrated its global network of 1,800 customers to a blockchain platform, in a major transition to fully digitalise trading, settlement and distribution for funds.

The global funds transaction network has been exploring the move to distributed ledger technology (DLT) for over two years and previously said the move would “transform the way in which funds are traded”.

In launching its new Distributed Market Infrastructure (DMI), Calastone said it has been engaged with a community of early adopters who have had access to the technology, including RBC Investor & Treasury Services (RBC I&TS), Bravura Solutions, Seven Investment Management, Multrees and Tilney Investment Management.

Calastone believes that the overall global cost of fund distribution could be reduced by as much as £3.4 billion, achieved through the technological mutualisation of the trading and settlement processes.

According to the global fund transaction network, the platform will digitalise trading, settlement and distribution of funds with intentions of reducing costs and providing greater speed, transparency and return on capital.

Calastone added that it will create an ecosystem within which the trading, settlement and servicing of funds is “friction free” and “eliminating ever-growing risk and costs for fund managers and investors.”

“Since we launched in 2008, our vision has been to use innovative technology to create a friction-free funds market and reduce the overall cost of trading for all market participants,” said Julien Hammerson, Calastone’s chief executive officer. “Today more than ever, investors expect increased returns, greater access and transparency, at a time when the funds industry feels the effect of growing cost pressures.

“The launch of the DMI today marks an important step for the entire funds industry, creating a friction-free global marketplace for funds. By leveraging the latest technology we are able to provide the investment management community with the tools they need to control risk and cost, while meeting the evolving needs of investors.”