Blockchain comes to managed funds

A global funds network used by 95% of Australian platforms will migrate its entire network to blockchain in May 2019.

Calastone expects its new distributed market infrastructure (DMI) to dramatically improve the infrastructure for trading and reporting of managed funds.

The new market infrastructure is based on distributed ledger technology (DLT). It will create a single shared network for all market participants to use including managed funds, platforms, administrators, custodians and registries. This will allow real-time viewing of orders between trading partners and quicker, more accurate settlements and reconciliations.

Calastone acting managing director Australia and New Zealand Ross Fox said more than 95% of Australian platforms are using its networks to send fund transactions to over 65% of fund managers.

"The beauty of the May 2019 migration to blockchain is that there is no technical migration at all from a client perspective," Fox said. "It will be completely seamless."

Fox said Australian clients won't have to revamp their systems (such as databases) to access the blockchain network. However, they will have the option to build specialised portals of their own.

"Our research with Forrester earlier this year shows that Calastone has saved the Australian funds industry over $38 million in costs since the network's local launch in 2012, achieved in line with Calastone's network growth," Fox said. "The DMI savings is expected to be significantly higher."

It is currently also processing cross-border transactions for Aussie clients and sees the DMI as an opportunity as funds passporting becomes available to Australian funds.

Calastone has over 1700 customers in 40 countries. Its Australian clients include companies such as Netwealth and Mainstream BPO.

It runs a team of five people out of its Sydney offices - mostly on the client relationship side. It expects to add a team member on the infrastructure development side early next year, in an inter-office move.

In the last four years, Calastone has transacted $80 billion over its Australian network in trading for 1100 individual funds.

Read more: CalastoneBlockchainMainstream BPONetwealth
Link to something PFfU311Q