Since Calastone was established, we have set ourselves a clear mission to support our clients in enabling the friction-free trading of mutual funds.
Now in our ninth year, we are proud to serve over 1,200 clients across 34 markets and have become the world’s largest global fund transaction network. This breadth of coverage gives Calastone a unique insight into the changing marketplace and the challenges our customers face, many of which we explore in our recent white paper ‘The digital fund distribution revolution: opportunity through change’.
As a critical partner to our many global clients, we continually monitor and assess the latest technologies that offer the potential to bring additional efficiencies and value to our clients. Distributed ledger technology (blockchain) is well documented as a technology that could drive efficiencies across many industries, and our belief is that Calastone is best placed to lead such innovation for funds.
Over the last few years, as part of our innovation programme, we have been investigating how blockchain could be used to benefit the trading and settlement of mutual funds. In June 2017 we announced the completion of the first phase of our proof-of-concept where we built and tested a new distributed market infrastructure on a blockchain, using the equivalent of a full day’s trading volumes from across our global transaction network.
This successful PoC has demonstrated the potential that such a new market infrastructure could reduce the frictional cost of trading on a global scale. By covering the entire lifecycle of mutual fund transactions, from order placement through to the settlement and payment, industry participants could significantly benefit from simpler processing.
The next phase of this exciting innovation programme is to test the feasibility of our distributed market infrastructure across different market participant types. We are now engaged with a number of design partners who will work with us to undertake this test and to explore and shape the wider business benefits that this could bring.
To learn more about the development of our distributed market infrastructure and developments in blockchain, we welcome clients and market participants to register and join our Special Interest Group, with whom we will share regular updates and seek input and ideas.