Calastone Completes Blockchain Funds Test

Announcements, Blockchain, FinTech, Investing, Regulation | June 14, 2017 By:

Global funds transaction network Calastone has successfully completed the first phase of a blockchain proof of concept for the settlement and trading of mutual funds.

Calastone said the tested distributed infrastructure model proved capable of processing transactions equivalent to a full day’s trading.  The items were sourced from across Calastone’s global transaction network, which spans over 1,200 fund distribution and fund manager clients across 34 markets.

The company said the key benefits of the product for the end investor will be the reduction in the total cost of fund ownership, a reduction in errors, and an increase in the resilience of market infrastructure.

“Successful initial testing, involving a large volume of trades across a fully representative global market universe, has given us a powerful understanding of how to optimize the distributed ledger technology to reduce the frictional cost of trading across the industry on a global scale,” said Calastone CIO Campbell Brierley. “The encouraging results of the initial blockchain PoC allow us to look confidently to a future where participants currently connected to the Calastone Transaction Network could seamlessly migrate to this distributed market infrastructure.”

“The positive results of our PoC has shown that by using distributed ledger technology across the entire lifecycle of mutual fund transactions, from order placement through to the settlement and payment, industry participants could significantly benefit from simpler processing,” sad Calastone Deputy CEO Ken Tregidgo.

The second phase of testing is expected to be completed over the next nine to 12 months. That will see the company engage with clients who represent all parts of the distribution chain: distributors, banks, and the administration side, to help shape the direction of the process for the industry as a whole.