Local stock exchange ZAR X, in conjunction with technology provider Adhara and nominee administrator Computershare South Africa, have launched the first distributed settlement system in South Africa for unit trusts.
The ZAR X system reinvents the traditional way of administering unit trusts using digital technologies as its foundation. 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 Mobi App.
“Since inception, ZAR X has pioneered technology and introduced innovative products and services to capital markets in the country,” says Etienne Nel, CEO of ZAR X. “We have prioritised cost reduction in both the listing process and for investors. To this end, we are driving even more efficiencies by offering unit trusts on the blockchain which 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. 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 vs Payment (DvP) settlement.
“We are delighted to be part of this production-grade blockchain solution to go live internationally. Adhara has used its Token+ product for this solution that is built on Hyperledger Besu (an open-source, enterprise-grade Ethereum client),” says Peter Munnings, COO and co-founder of Adhara.
“This is an exciting initiative, and we are pleased ZAR X has appointed Computershare as the nominee administrator for the first distributed ledger settlement system for unit trusts. We have a proud track record of using robust technology and infrastructure to support the diverse and unique requirements of each of our clients,” adds Bennie van der Westhuizen, CEO of Computershare South Africa.
The project will go live in the last quarter of this year and will be available via the ZAR X Web site (www.zarx.co.za) and the ZAR X Mobi App available in Apple iOS and Android app stores.