Calastone to Bring Mutual Funds Market Onto Blockchain in 2019

PR71349

LONDON, Dec. 4, 2017, /PRNewswire=KYODO JBN/--

Calastone, the global funds transaction network, today announces that the

technology underpinning the core of Calastone's global transaction network will

be migrated onto a full blockchain-enabled infrastructure.

Calastone's network connects more than 1,300 financial service organisations

across 34 global markets processing over £80bn of trades and 7 million messages

each month, making it the largest global fund transaction network. Calastone

has transformed the funds sector, enabling frictionless trading by making it

possible for all trading entities and counterparties to connect, interact,

process and settle transactions digitally.

In June, Calastone successfully completed the first phase of its

blockchain-enabled distributed market infrastructure (DMI) proof-of-concept

(PoC), which saw Calastone test and verify the feasibility of using the

technology to create a global marketplace for the trading and settlement of

mutual funds. Today the company announces that 2019 will see the technology

underpinning the core of its network moving to a private and permissioned based

blockchain infrastructure.

The mutual funds market remains a sector challenged by operational

inefficiencies, cost and risk, often resulting in an inability to meet fast

evolving customer demands.  The current requirement to replicate and reconcile

records across the value chain creates an overhead which dwarfs the benefits

already offered by Calastone's trading and settlement solutions. The move to

blockchain enables the firm's global customer base to plan for and deliver

major improvements in a controlled, measured way.

This migration enables Calastone to achieve the highest levels of operational

resilience and scale through the distributed, yet private nature of the new

blockchain infrastructure. The PoC has proven the performance capabilities that

enable the processing of transaction volumes and fund flows to be many times

greater than are expected today, demonstrating scalability of the new

infrastructure.

Julien Hammerson, CEO Calastone adds:

"As we build the business we consistently put innovation and customers first.

Our vision remains to work with the industry to reduce the overall total cost

of ownership by making it friction-free and increasing value for all market

participants. Our services have introduced significant operational and cost

efficiencies into the sector and as we scale our business for the future, we

are ensuring we have the connectivity and technology to continue to service the

increasingly sophisticated demands for efficiency, value and speed.

In making this first step using blockchain, we are providing our customers with

the requisite tools they need, to be future-ready. We are delivering a solution

that will not disrupt the current connectivity and interaction our customers

have with our network, rather putting them in pole position to make the step

change to the blockchain when timely and additive to their specific objectives

and requirements."

As an industry sector under increasing cost, operational and regulatory

pressures - with the advent of GDPR and the imminent introduction of MiFID II -

Calastone recognises that blockchain can provide much needed relief for the

funds market in reducing the cost of friction-free trading and the total cost

of ownership, whilst delivering the speed of service and regulatory

transparency, which will soon be a basic pre-requisite worldwide.

Ken Tregidgo, Deputy CEO, Calastone comments on the scale of opportunity

blockchain affords the funds sector:  

"The funds industry is subject to increasing cost pressures, whilst investors

continue to demand increasing returns and regulatory transparency. The initial

shift we're making towards blockchain marks the first major step to addressing

these issues offering significant potential for the entire industry. Our

network already connects all market participants, from fund managers to

transfer agents and distributors, and introducing this new technology offers

significant potential for the future, for a friction-free and a more

streamlined process for all counterparties worldwide.

Whilst the potential for long term change is great, the migration path for

customers to take advantage of the future infrastructure will remain seamless,

enabling clients to move when they are ready. A blockchain-enabled marketplace

means alleviating operational inefficiencies, increasing performance and

generating greater savings - a win-win for everybody.  

We're conscious that developing a better infrastructure, ready to meet the

future needs of the industry is a long process, though we're thrilled to see

the first stages of this come into effect and are excited about the

opportunities it will bring."

For more information on Calastone's blockchain-enabled DMI, please go to:

http://www.calastone.com/insights/a-brave-new-world-funds-europe-interview-with-ken-tregidgo/

About Calastone

Calastone is the largest global funds transaction network, connecting many of

the world's leading financial organisations. Over 1,300 customers in 34

countries and territories benefit from Calastone's services, processing over 7

million messages and £80 billion of transactions each month.

Our mission is to reduce the frictional cost of trading using smart technology

solutions and industry collaboration, lowering operational risk and enhancing

customer profitability through digitisation and automation.

Calastone is headquartered in London and has offices in Luxembourg, Hong Kong,

Taiwan, Singapore and Sydney.

For more information, please contact:

FTI Consulting LLP

Ollie Bailey-Pratt / Darius Alexander

calastone@fticonsulting.com

Tel: +44-(0)20-372-710-00

Source: Calastone