For the first time in the fund industry, investors are using a blockchain based platform to purchase real funds’ shares with real cash.

FundsDLT uses distributed ledger technology (DLT) and smart contracts to dramatically improve efficiency in the fund order processing.

Natixis Asset Management, an affiliate of Natixis Global Asset Management, revealed yesterday that investors had completed a purchase of shares using FundsDLT. The blockchain-powered platform is a collaboration between Fundsquare (a subsidiary of the Luxembourg Stock Exchange), InTech (a subsidiary of POST Group) and KPMG Luxembourg.

Olivier Portenseigne, Managing Director of Fundsquare, comments:

“We are proud to have run the first real blockchain transactions in the history of investment funds. It was important for us to demonstrate that FundsDLT works in order to create the necessary trust that blockchain will answer the current needs of the asset management industry in terms of operational efficiency and digitalization. This will give our customers easy access to a powerful new generation of services.”

The intention is for the FundsDLT platform to be used across several of the asset manager’s business lines, enhancing distribution mechanisms. This will mean significantly reduced administration costs and time to process transactions, both for asset managers and other asset servicers. In addition to adding secure automation to processes, the model is applicable to a range of funds — regardless of jurisdiction.

The FundsDLT network.

Orders are transmitted from the FundsDLT mobile app to their blockchain platform, from where the information is immediately transmitted to all parties involved in the transaction, each one having its own node on the FundsDLT blockchain. Approval from the transfer agent — in this case CACEIS — is the first action, and triggers the clearing and settlement process.

Investors credited S-money account with funds to cover the transaction before completing the order. S-money APIs were a major contributor to this success, as they allowed for the movement of money via state-of- the-art technology. This real transaction has paved the way for a new financial services model.

Nasir Zubairi, CEO of the Luxembourg House of Financial Technology commented on the announcement:

“This initiative demonstrates the leading role Luxembourg is playing in financial services innovation. The collaboration within the tight-knit community in the Grand-Duchy is the driving force behind the progress being made and the achievements of the FundsDLT platform.”

See the official press release for more information, here. View a demo of the FundsDLT platform below:

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