Interbank co-operative Swift is working with Symbiont and seven securities players to trial a blockchain-based corporate actions system.
The pilot will seek to use Symbiont’s proprietary technology platform, Assembly, using its smart contracts and blockchain capabilities to deliver automated corporate actions data to multiple market participants in near real time.
Swift has roped in a number of leading custodians and asset managers, including American Century Investments, Citi, Vanguard and Northern Trust, to participate in the project.
“Major asset managers will have hundreds of custodian relationships, with assets and securities scattered across a wide range of counterparties,” says Jonathan Ehrenfeld, strategy director at Swift. “If there’s a corporate event, these asset managers and other intermediaries will receive information from all these sources, and this is where we start to see problems.”
Aanalysis conducted by Swift indicates that 30% of the cost of processing corporate actions data arises from manual activities, such as data cleansing, formatting and interpretation.
“By bringing Symbiont’s Assembly and smart contracts together with Swift’s extensive network, we’re able to automatically harmonise data from multiple sources of a corporate action event,” says Swift CIO Tom Zschach. “This can lead to significant efficiencies. Corporate action data from Swift messages is translated by the Swift Translator and uploaded in Symbiont’s blockchain. Their smart contract technology can then compare information shared between participants and flag discrepancies, contradictions or inconsistencies across custodians.
“If the solution proves successful, intermediaries would need to field fewer queries from clients about corporate action data. It also means global custodians and asset managers could reduce the number of people who spend their time manually scrubbing corporate action data.”
He says the project is currently in development with a pilot group of participants that are set to test it and provide feedback later this month.
"We will then compile the results and share them with the community," says Zschach. "If successful, we look forward to extending coverage to more corporate event types and will assess the potential to bring it to production for the wider Swift community."