Sweden's SEB is working with Nasdaq to develop a prototype for a mutual fund trading platform based on blockchain technology.
The aim of the project is to increase efficiency in the processing of fund units on behalf of the Swedish bank's clients by connecting all parties to a trade to a a distributed database in which all transactions and changes are registered among all participants in real-time.
In the absence of a central depository, the purchase and sale of fund units in the Swedish market is currently characterised by manual routines, long settlement cycles and paper driven processes.
"With the help of a blockchain we can create a faster, simpler, more effective and reliable fund market," says Göran Fors, acting head of Investor Services at SEB. "Funds are increasingly important for our clients and it is with great pleasure that we can announce this important project together with Nasdaq."
The cooperation agreement entails that SEB and Nasdaq will continue to develop the technology with the end goal of creating a working prototype, which will be based on the Chain.com blockchain ledger. In addition, the two parties have opened a channel for collaboration with additional interested parties on building a uniformed market infrastructure for Sweden's fund market.
Last month, SIX Swiss Exchange announced that it is to investigate the prospect of using distributed ledger technology in its over-the-counter structured product business as part of its long-standing trading technology contract with the US exchange.