Investors in Luxembourg have successfully purchased fund shares through FundsDLT, a blockchain-powered platform for fund managers.
Investors in Luxembourg have successfully purchased fund shares through a blockchain-powered platform for fund managers, called FundsDLT, developed as a collaboration among KPMG in Luxembourg, Fundsquare (a subsidiary of the Luxembourg Stock Exchange) and InTech (a subsidiary of POST Group).
“We believe these are the first fund sales using a blockchain-based platform, which were carried out in the world’s second largest market for net assets under management,” said Eamonn Maguire, Global Leader for KPMG’s Digital Ledger Services. “It is a major breakthrough in validating blockchain as a technology to enable funds trading and has the potential to reshape the investment industry, bringing important commercial benefits to industry participants.”
The FundsDLT platform enables asset managers to sell funds directly to investors, thereby dramatically reducing the cost of administration and the time needed to process transactions. Orders are submitted directly to the FundsDLT smart contract platform and the information is immediately and simultaneously transmitted, using blockchain technology, to all of the parties involved in the transaction. In addition to reducing administration time, the platform streamlines compliance procedures so that customers will no longer have to be verified by each party involved.
According to Said Fihri, Leader for Digital Ledger Services, KPMG in Luxembourg, “Where the time between an investor making a decision and a transfer agent executing it can take up to 6 days, the FundsDLT platform will do it in hours – and in the not-too-distant future, seconds.”
The first FundsDLT share purchases were of funds of Natixis Asset Management, a leading affiliate of Natixis Global Asset Management, which has announced its intention to be the first asset management firm to use the FundsDLT platform, taking advantage of blockchain technology to enhance distribution across several of its business lines.
“This is a project that KPMG is immensely proud of,” added Jeremy Anderson, Chairman, Global Financial Services, KPMG International. “It reflects our business case driven approach to blockchain and demonstrates that together with our collaborators, we are helping to enable transformation for individual clients and for markets in general. We believe asset managers in markets outside of the EU, including North America and Asia Pacific, may potentially benefit from the FundsDLT approach as they explore their options with blockchain technology.”
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