The relatively new South African stock exchange ZAR X has launched what it’s calling the country’s first distributed settlement system for unit trusts.
Working with technology provider Adhara and nominee administrator Computershare South Africa, ZAR X will use the blockchain to allow the public to purchase and settle unit trusts directly from fund managers in a secure way.
“The ZAR X system reinvents the traditional way of administering unit trusts using digital technologies as its foundation,” the exchange said in a statement on Tuesday. “Instead of monthly administration fees, investors pay a once-off transaction fee. Furthermore, they can transact in unit trusts either through their ZAR X broker or on any mobile device using the ZAR X mobile app.”
ZAR X CEO Etienne Nel said the blockchain is likely to be the future of financial markets settlement.
“The system provides regulators and investors with full transparency and transaction history in real time. As the blockchain serves as a ledger of events that are distributed or shared between different parties, it can only be updated by consensus of the participants in the system,” ZAR X said. “This effectively means the blockchain provides a single version of the truth and eliminates the need for reconciliations.”
The Adhara components allow for the unit trusts and cash to be tokenised on the same ledger. This ensures all transactions occur “on-chain”, providing real-time delivery versus payment settlement.
Adhara has used its Token+ product for the solution, which is built on Hyperledger Besu, an open-source ethereum client.
The project will go live in the last quarter of 2019. — © 2019 NewsCentral Media