FundsDLT and UBS Asset Management (UBS AM) have successfully demonstrated the advantages of a blockchain-based distribution model for investment funds.
The proof-of-concept pilot, which was supported by Zurich-based research and product development company, i.AM Lab, explored a front-to-back blockchain-based investment fund distribution model.
The whole distribution process was covered by the pilot, starting with the onboarding of investors, transaction initiation up to settlement and transfer agency.
All participants involved on FundDLT’s blockchain-based platform were given real-time transparency on the straight-through transaction, which included real-time reporting as well as status updates.
FundsDLT received regulatory approval for the go-live of the platform at the beginning of July. It runs on Consensys Quorum, a permissioned enterprise blockchain based on Ethereum, and is designed to simplify the funds distribution process and foster greater financial inclusion to a wider range of investors.
It is also backed by the likes of Clearstream, Credit Suisse, Natixis Investment Management, and the Luxembourg Stock Exchange.
“The successful proof-of-concept pilot in collaboration with FundsDLT has demonstrated the promising potential of distributed ledger technology in making the fund value chain more efficient, transparent and convenient for our clients across front, middle, and back offices,” said Patric Huber, head of product strategy at UBS AM.
Olivier Portenseigne, CEO of FundsDLT, said investors and asset managers need long-term solutions that enable them to transform their businesses and grow their investor base. “This requires new models that focus on seamless digital delivery, automation and process and operational efficiency.”
Clearstream ICSD rival Euroclear recently revealed that it had successfully completed an experiment which confirmed blockchain as a suitable technology for post-trade market operations.