First Blockchain Transaction in Fund Distribution Completed

Announcements, Blockchain, FinTech, Investing, Regulation | July 7, 2017 By:

Natixis Asset Management has announced that investors have successfully purchased shares in Natixis AM’s funds through FundsDLT, a blockchain-powered fund distribution platform for managers. The platform streamlines a range of fund administration and order-routing tasks by using blockchain to automate several processes in a secure manner. The model is applicable to a wide range of funds and does not depend on the jurisdiction.

Natixis Asset Management is a privately owned investment manager. The firm provides its services to institutional investors, companies, private banks, retail banks, and other distribution channels. It launches and manages equity, fixed income, money market, balanced, and multi-asset mutual funds for its clients. The firm invests in the public equity and fixed income markets across Europe and in global emerging markets. It also invests in value stocks of small-cap and large-cap companies.

FundsDLT, co-developed by Luxembourg Stock Exchange subsidiary Fundsquare, InTech and KPMG, is designed to enable asset managers to sell funds through a new distribution channel while significantly reducing administration costs and the time to process transactions for both asset managers and other asset servicers.

The company said that the successful execution marks the first time investors in the fund industry are using a blockchain-powered platform to purchase real funds’ shares with real cash. According to the company, the investors use the FundsDLT mobile app to submit the standard subscription order for the shares. Via the API, the order is then transmitted to the FundsDLT platform and the information is immediately and simultaneously transmitted using blockchain technology to Natixis AM and the other parties involved in the transaction, each one having its own node on the FundsDLT blockchain.

Cash and payment processing was handled using S-money, a digital unit of account created by Groupe BPCE. Investors topped up their S-money account with sufficient funds to cover the transaction before completing the order.

“It is really exciting to be part of such a tremendous step forward,” said Said Fihri of KPMG Luxembourg. “We not only replicated trades in the blockchain; we moved real cash and invested in a real fund. We are close to having an industrial product that could be used in different configurations: distributors, IFA, robo advisors and D2C.”

“We are proud to have run the first real blockchain transactions in the history of investment funds,” said Olivier Portenseigne, managing director of Fundsquare. “It was important for us to demonstrate that FundsDLT works in order to create the necessary trust that blockchain will answer the current needs of the asset management industry in terms of operational efficiency and digitalisation. This will give our customers easy access to a powerful new generation of services.”

“Natixis Asset Management is delighted to have contributed to this pioneering first blockchain enabled trade via the FundsDLT platform,” said Matthieu Duncan, CEO of Natixis Asset Management. “We believe the potential for blockchain technology to enhance distribution mechanisms in the asset management industry is very significant.”