Fund manager’s blockchain experiment removes transfer agent role

A Paris-based asset manager has completed a blockchain trial to process fund subscriptions and redemptions without the need for a transfer agent.

OFI Asset Management, which has €67 billion of assets under management, successfully completed the trial and has now started to process live transactions, according to Iznes, a record-keeping platform involved in the project.

The fund manager used Iznes’ platform for experimental fund processing with selected clients and found investors and distributors could “easily” subscribe and redeem fund units via a direct connection with OFI, “thereby removing the need for the transfer agent” and reducing costs.

Iznes said more asset management firms were joining its platform and that others already on it included Groupama Asset Management, La Financière de l’Échiquier, and Arkéa Investment Services.

SETL Development provides the platform’s blockchain technology, which enables market participants to move cash and assets directly between each other, maintaining a “permissioned distributed ledger” of ownership and transaction records, which the firms says simplifies the process of matching, settlement, custody, registration and transaction reporting.

Sir David Walker, former Barclays chairman and executive director of the Bank of England, is SETL’s chairman, and Peter Randall, who founded stock exchange Chi-X, is CEO.

Randall said: “This is an important step in bringing 21st century technology to the asset management sector, including reduced costs, better transparency and workflow.

“When this project is fully operational it will be the largest single instance, by value, of a permissioned blockchain in the world.”

In July 2017, what was claimed to be the “first real” blockchain fund transaction was carried out and involved fund manager Natixis Asset Management. It also involved a transfer agent, Caceis.

 ©2018 funds europe

HAVE YOU READ?

THOUGHT LEADERSHIP

Innovative US companies are providing some of the solutions to the climate crisis and transition to a more sustainable economy. We see potential opportunities in areas including renewable energy and…
FIND OUT MORE
This white paper outlines key challenges impeding the growth of private markets and explores how technological innovation can provide solutions to unlock access to private market funds for a growing…
DOWNLOAD NOW

IRELAND SPOTLIGHT

Visit our dedicated Ireland channel for all the latest news and analysis on the country's investment industry.
READ MORE

PRIVATE MARKETS FUND ADMIN REPORT

Private_Markets_Fund_Admin_Report

LATEST PODCAST