Natixis Asset Management, an affiliate of Natixis Global Asset Management, has announced that investors have successfully purchased shares in Natixis AM’s funds through FundsDLT – a blockchain-based fund distribution platform for fund managers.

The platform has been developed by Fundsquare, a subsidiary of Luxembourg Stock Exchange, in collaboration with InTech, a subsidiary of POST Group, and KPMG Luxembourg. FundsDLT is being developed to enable asset managers to sell funds through a new distribution channel, while significantly reducing administration costs and the time to process transactions for both asset managers and other asset servicers.

The successful execution marks the first time investors in the fund industry are using a blockchain-powered platform to purchase real funds’ shares with real cash.

“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”, Olivier Portenseigne, Managing Director of Fundsquare, said.

In its official release, Natixis explained the whole process:

• Using the FundsDLT mobile app, the investors submit the standard subscription order for the shares. The order is then transmitted to the FundsDLT platform via the API and the information is immediately and simultaneously transmitted using blockchain technology to Natixis AM and the other parties involved in the transaction, each one having its own node 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: all of which take place on the FundsDLT platform.
• The cash and payment process was handled using S-money, a part of Groupe BPCE. Investors topped up their S-money account with sufficient funds to cover the transaction before completing the order.

“It is really exciting to be part of such a tremendous step forward. 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”, Said Fihri of KPMG Luxembourg explained.

Natixis said that FundsDLT will streamline a range of fund administration and order-routing tasks by using blockchain to automate several processes in a secure manner. The model is applicable to a wide range of funds and does not depend on the jurisdiction. With the successful completion of the first transactions, the team is now looking to investigate other use cases and applications in the field of B2B and B2B2C.

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