Calastone, the global funds transaction network, has completed the first phase of its distributed market infrastructure proof-of-concept (PoC) for the trading and settlement of mutual funds.
According to Calastone, the model processed transactions equivalent to a full day’s trading sourced from across its global transaction network, which spans over 1,200 fund distribution and fund manager clients across 34 markets.
The product is expected to tackle the frictional cost of global trading across the industry and simplify the trading process across the transaction chain.
The second phase of the PoC has begun and Calastone is engaged with several design partners drawn from its global client base.
Campbell Brierley, chief information officer for 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.”
Ken Tregidgo, Calastone deputy CEO, added: “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.”
