Investment Operations

Financial Institutions to Develop Blockchain-based Front-to-Back Office Investment Fund Platform

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Clearstream, Credit Suisse Asset Management, the Luxembourg Stock Exchange and Natixis Investment Managers have confirmed a Series A investment in FundsDLT to develop a novel decentralized technology platform to facilitate the distribution of funds based on distributed ledger technology (DLT). Industry observers say this move marks a major milestone in the evolution of FundsDLT, originally initiated and incubated by the Luxembourg Stock Exchange and its affiliate Fundsquare.

FundsDLT is built using permissioned blockchain technology based on Ethereum that ensures privacy and high performance. According to FundsDLT, their platform enables the reengineering of the fund distribution value chain, from front to back, covering the entire fund lifecycle. The platform, they say, allows asset managers, distributors, asset servicers, and the entire supply chain to reduce costs by removing redundant activities, while providing the opportunity to achieve necessary transparency on end investors and creating the foundation for digital fund distribution. Analysts say the Series A funding will strengthen the FundsDLT platform and accelerate its commercial development.

“The launch of FundsDLT is an important step toward our shared goal of promoting the adoption of blockchain and digital assets across the financial industry,” said Robert Scharfe, CEO of the Luxembourg Stock Exchange.

FundsDLT is a project that has the potential to change fund distribution and bring substantial benefits to the entire ecosystem. The digital transformation poses some of the greatest challenges and opportunities for the investment management industry today, and blockchain can play an important role. “We believe it is critical for the investment management industry to increase transparency and improve operations rapidly,” said Joseph Pinto, Chief Global Operating Officer of Natixis Investment Managers. “FundsDLT will help us achieve these objectives and will, in turn, allow us to provide an enhanced experience for investors by leveraging blockchain technology,” Pinto added.