Calastone, the largest global funds transaction network, has confirmed the roll-out of its blockchain Distributed Market Infrastructure (DMI), explaining that the technology underpinning its network has now been migrated to a blockchain-enabled market infrastructure.
Analysts say 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 organizations 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. Calastone has highlighted the scale of tangible value the DMI could bring to the industry, forecasting more than £3.4bn in savings per year for the mutual funds market worldwide, achieved through the technological mutualization of the distribution model.
According to the company, financial services organizations around the world – whatever size or scale – can, through the DMI, now access a fully mutualized 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.
“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 organizations interact with one another,” said Campbell Brierley, Calastone’s Chief Innovation Officer.
“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, utilize 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, Brierley added.”
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. “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,” said Julien Hammerson, Calastone’s Chief Executive Officer.
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,” Hammerson continued.
In the lead up to the go-live, Calastone says it 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.