The Nasdaq and the Nordic corporate bank SEB have begun testing on a Blockchain technology-based trading platform for mutual funds. The goal of the platform is to make trading of funds faster, smoother and easier for all parties.
The platform intends to make it possible for all fund managers, distributors and other mutual fund participants to make trades directly onto the Blockchain technology ledger. This would increase efficiency, tracking and auditability.
The current Swedish mutual fund market does not have a centralized tracking mechanism in place (unlike equities markets), and so tracking and maintaining a ledger of transactions is a radically complex process involving a host of players. Some portions are still recorded with pen and paper.
A Blockchain technology solution would radically alter the way the transactions would proceed, adding smoothness and speed to an otherwise relatively antiquated system. In a statement, Göran Fors, head of Investor Services at SEB, said:
“With the help of a Blockchain, we can create a faster, simpler, more effective and reliable fund market.”
Such market controls will only serve to increase the flexibility of the funds market in Sweden and will provide a “perfect use case for Blockchain,” according to the head of product management and market technology at Nasdaq. As application grows, so will adoption.