BNP Paribas Securities Services and the direct investment platform SmartAngels have entered in to a strategic partnership using blockchain technology for issuing securities.
The partnership is intended to allow private companies to issue securities on the SmartAngels primary market, giving investors access to the secondary market, all using distributed ledger, or blockchain, technology.
BNP Paribas has hailed the partnership as a step forward in crowdfunding and management of private share ownership.
The bank’s securities services division is developing a share register using blockchain, which will automatically register securities issued by SmartAngels’s client companies.
Blockchain technology will allow for immediate processing of investor payments and issuance of e-certificates, meaning transactions are made quickly, simply and securely, and at a lower cost than was previously possible.
SmartAngels clients will benefit from standardisation of the securities registration process and additional trade processing security. For issuers, the blockchain platform will also simplify management of shareholders.
Trading shares directly on the SmartAngels platform should create a secondary market for those investors, accelerating movement and increasing liquidity, while also helping start-ups and small and medium-sized enterprises (SMEs) to access financing.
The pilot scheme is due to launch in the second half of 2016, subject to regulatory approvals.
Philippe Ruault, head of product for clearing, custody and settlement at BNP Paribas Securities Services, said: “By applying Blockchain technology in the crowdfunding sector, we will accelerate cash and securities flows and make them more secure, using e-certificates.”
“This is a major innovation for the custody and account-keeping of unlisted securities. It also provides BNP Paribas Securities Services with the opportunity to test a solution that could be applied to listed securities markets. The use of Blockchain is part of BNP Paribas’s digital strategy.”
SmartAngels founder Benoit Bazzocchi added: “At the moment, only a few thousand companies are listed on the financial markets in Europe. The integration of Blockchain on crowdfunding platforms will give hundreds of thousands of start-ups and growth SMEs fast access to low-cost financing from individual and professional investors.”
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