BNP Paribas Securities Services has conducted a technical proof of concept (PoC) for mutual fund transactions on technology provider fundsonchain's settlement platform.
The fundsonchain platform enables the entire fund processing to be automated via end-to-end processing of tokenised fund shares, based on distributed ledger technology (DLT).
In collaboration with German-based financial service MEAG, and IT and services company ERGO, BNP Paribas Securities Services was a custodian and crypto securities register manager for the PoC.
MEAG acted in its role as the regulated capital management company, while ERGO functioned as an institutional investor.
The PoC enables participants to fully digitise their fund processing and to largely eliminate sources of error in the transaction process by using a DLT-based "source of truth".
The fundsonchain platform can be used to process investment funds that have already been set up as electronic fund shares via tokenisation.
This solution creates the foundation for investment funds issuance with electronic shares or crypto fund shares.
In addition, the custodian can take over the register management itself through fundsonchain and expand its own range of services for its customers on a digital basis.
The PoC comes in the same week that BNP Paribas Securities Services announced it had collaborated with DTCC to provide a solution which aids its clients in preparing for Phase 6 of the Uncleared Margin Rules (UMR).
The collaboration will see BNP Paribas’ Triparty Collateral Management solution connect with DTCC’s Margin Transit Utility service.
