Credit Suisse Asset Management (CSAM) and Banco Best, a Portugal-based bank, have used blockchain technology to process an end-to-end fund transaction and said “considerable benefits” would come from the technology.
The firms – who are the latest in the funds industry to experiment with blockchain – said the transaction captured each component of the trade lifecycle from order delivery to trade settlement.
The trade was processed on FundsDLT, the Luxembourg-based blockchain initiative that is a collaboration between Fundsquare, a subsidiary of the Luxembourg Stock Exchange, IT specialist InTech and KPMG Luxembourg.
This utilises a permissioned, decentralised distributed ledger to support the digitalisation of fund distribution, using blockchain to settle transactions and to provide a secure record of ownership and transaction history.
The participants said that this blockchain-based framework delivered a significant reduction in the time between subscription request and trade settlement compared with traditional processing arrangements for fund transactions.
The application programme interface, or API, for this implementation was developed by Banco Best, which also developed a dedicated app to monitor client user experience across the trade process.
Pascal Nageli, chief digital officer at Credit Suisse Asset Management, said blockchain technology is an important component of the firm’s digitalisation strategy.
“With successful completion of real, live transactions we were able to prove that considerable benefits can be achieved with distributed ledger technology,” he said.
Credit Suisse Fund Services in Luxembourg was involved and said the technology was integrated with its core platforms.
In July 2017, Natixis Asset Management became the first asset manager to execute a fund transaction on the FundsDLT platform when it sold fund shares to a pilot investor, with Caceis standing as transfer agent. The test conducted by CSAM, Banco Best and FundsDLT goes a step further by bringing end-to-end processing, from order delivery across the transaction lifecycle, onto blockchain.
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