Campbell Brierley

Calastone, the largest global funds transaction network, has announced the successful go-live of its blockchain Distributed Market Infrastructure (DMI).

The technology underpinning Calastone’s network has now been migrated to a blockchain-enabled market infrastructure. The migration of Calastone’s global network of more than 1,800 customers across 41 markets is a world-first and represents the largest community of global financial services organisations connecting and transacting via distributed ledger technology.

Less than two years since Calastone announced the completion of its first phase to test the feasibility of using blockchain to develop a common global marketplace for the trading and settlement of funds, the company’s DMI is today live. This represents a major step in enabling digitalisation and friction-free trading at a significant global scale. Calastone has highlighted the scale of tangible value the DMI could bring to the industry, forecasting more than £3.4bn [over A$6 bn] in savings per year for the mutual funds market worldwide, achieved through the technological mutualisation of the distribution model.

Financial services organisations around the world – whichever size and scale – can, through the DMI, now access a fully mutualised global funds marketplace whereby the trading, settlement and servicing of funds is conducted in real-time. This will play a key role in stripping out the ever-increasing costs, operational burdens and risks inherent within the current model.

Campbell Brierley, Calastone’s Chief Innovation Officer, comments; “Developing the DMI has been a fulfilling journey of innovation and it is incredibly exciting to have completed a world first for the financial services sector. Over 1,800 clients across 41 markets are now transacting on the DMI, transforming how fund organisations interact with one another.

Through Calastone’s blockchain-enabled market infrastructure all participants across the fund’s world can work together seamlessly and view trading activity in real-time. Information now ripples instantly across the market, a step change from the previous, fragmented model. Financial services firms worldwide can, via the DMI, utilise new services, enhanced capabilities and new investment opportunities, allowing them to evolve their proposition to one that will be more competitive and valuable long-term.”

At launch, the DMI immediately solves several key points of friction which are fully automated and visible as all participants are connected into a common infrastructure. It will also bring a new service, the Sub-Register, which creates a shared, real-time view and history of the registers between trading partners at any point in the distribution chain.

Julien Hammerson, Calastone’s Chief Executive Officer, adds; “Since we launched in 2008, our vision has been to use innovative technology to create a friction-free funds market and reduce the overall cost of trading for all market participants. Today more than ever, investors expect increased returns, greater access and transparency, at a time when the funds industry feels the effect of growing cost pressures.

The launch of the DMI today marks an important step for the entire funds industry, creating a friction-free global marketplace for funds. By leveraging the latest technology we are able to provide the investment management community with the tools they need to control risk and cost, while meeting the evolving needs of investors.”

In the lead up to the go-live, Calastone has been engaged with a community of early adopters who have had access to the technology, including RBC Investor & Treasury Services, Bravura Solutions, Seven Investment Management, Multrees and Tilney Investment Management.

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Campbell Brierley

Calastone, the global funds transaction network, yesterday announced the successful completion of the first phase of its distributed market infrastructure proof-of-concept (PoC) to test the feasibility of using blockchain to develop a common global marketplace for the trading and settlement of mutual funds.

The tested distributed infrastructure model proved capable of processing transactions equivalent to a full day’s trading sourced from across Calastone’s global transaction network, which spans over 1,200 fund distribution and fund manager clients across 34 markets.

Campbell Brierley, Chief Information Officer of Calastone said, “Successful initial testing, involving a large volume of trades across a fully representative global market universe, has given us a powerful understanding of how to optimise the distributed ledger technology to reduce the frictional cost of trading across the industry on a global scale. Placing the market on a blockchain effectively opens the door for potential efficiencies across the whole transaction lifecycle in excess of those that could be achieved via the optimisation of transaction processing alone.”

He continued, “The encouraging results of the initial blockchain PoC allow us to look confidently to a future where participants currently connected to the Calastone Transaction Network could seamlessly migrate to this distributed market infrastructure.”

Ken Tregidgo, Calastone Deputy CEO explained, “The positive results of our PoC has shown that by using distributed ledger technology across the entire lifecycle of mutual fund transactions, from order placement through to the settlement and payment, industry participants could significantly benefit from simpler processing.”

Julien Hammerson, Calastone CEO commented, “Our vision is to enable friction-free trading for funds industry participants. Since launching in 2008, Calastone has pioneered ways to introduce operational and functional efficiencies for the industry from order routing, through to settlement, reconciliations, market data distribution and analytics. The scale and connectivity we have built in major markets around the globe makes us the natural partner to explore operational and infrastructural efficiencies across the global funds industry.”

Calastone has announced a second phase to its PoC, and is now engaged with a number of design partners drawn from its global client base. “The design partners will help us test the model and understand the business challenges and requirements from a market participant perspective. It’s through technological innovation such as this that we aim to address the business and technical trading challenges faced by our customers across international markets,” Tregidgo concluded.

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