20 April 2018

Luxembourg funds industry completes first live blockchain transaction

06 July 2017  |  14325 views  |  0 Stock exchange close up numbers 3

Investors have completed the first live share purchases over a blockchain-powered fund distribution platform.

The cash for share transactions were executed for Natixis Asset Management funds using a platform co-developed by Luxembourg Stock Exchange subsidiary Fundsquare, InTech and KPMG.

Investors participating in the transaction used the FundsDLT mobile app to submit the standard subscription order for the shares. The order is then transmitted to the FundsDLT platform for onward routing to Natixis AM and other interested parties located at discrete nodes on the FundsDLT blockchain.

The transfer agent - in this case CACEIS - is the first to act by confirming the transaction and logging it as 'approved' or 'declined'. Approval triggers the clearing and settlement processes across the Funds DLT platform.

Cash and payment processing was handled using S-money, a digital unit of account created by Groupe BPCE. Investors topped up their S-money account with sufficient funds to cover the transaction before completing the order.

Said Fihri of KPMG Luxembourg says: "We not only replicated trades in the blockchain; we moved real cash and invested in a real fund. We are close to having an industrial product that could be used in different configurations: distributors, IFA, robo advisors and D2C.”

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