Calastone’s global network will migrate to blockchain in May next year via the company’s new distributed market infrastructure (DMI).
The migration will connect global financial organisations using distributed ledger technology, marking a significant step for digitalising the funds sector, Calastone revealed.
The DMI will create a global funds marketplace where buyers and sellers can connect and transact.
Additionally, the ever-growing risk and costs for fund managers and investors embedded within the current system will be eliminated in the new ecosystem, Calastone noted.
At the same time, organisations can leverage the open technology on which the DMI is built, which allows them to offer new services and investment opportunities better suited to the changing, more sophisticated needs of investors.
Calastone suggested that it has the potential to reduce the overall global cost of fund distribution by as much as £3.4 billion per year through the technological mutualisation of the trading and settlement processes.
Campbell Brierley, Calastone’s CIO, commented: “By bringing all trading relationships together, within our shared blockchain-enabled infrastructure, all participants benefit through the real-time view of each record and powerfully, from a data perspective, a single version of the truth.”
“Instantly, this alleviates common friction points that exist today, including areas such as reconciliation and settlement, which are resolved automatically with all transactions being performed in the same environment. By making friction-free trading accessible to all parties in the value chain, we are creating an environment that marks an inflection point for the future of the funds sector, optimised to meet the needs of customers and investors now and in the long-term.”
Stephen Leggett, Calastone’s COO, said: “Migrating our global transaction network onto the new DMI will be a seamless experience for our customers, all of which will quickly and easily be able to leverage the advantages that distributed ledger technology affords.”
Julien Hammerson, Calastone’s CEO, cited: “Funds remain a vital investment vehicle, though remain hampered by continually rising costs and the threat of competition, ultimately rendering the current system economically and operationally unsustainable. Through leveraging blockchain technology, the DMI transforms the way in which funds are traded, enabling an investment management community that can meet the changing needs of investors.”
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