CSOP Asset Management and Singapore fintech Hashstacs, or STACS, have completed a prototype of a blockchain-based over-the-counter (OTC) derivatives trade processing platform, the companies said Tuesday.
The platform, which received support from the Investment Management Association of Singapore (IMAS), will provide automated, concurrent processing and reconciliation of OTC derivatives trades, the companies said in a press release.
«Given that the OTC trades are highly bespoke and unstandardised, the collaboration would also see the incorporation of machine learning algorithms and optical character recognition technology to facilitate automatic data ingestion and transformation of unstandardised and unstructured trade parameters,» the companies said. «Visibility of incoming trades will also be provided to both parties, with each transaction record being stored in an audit log, thus increasing transparency and auditability of data.»
David Ng, CEO of CSOP Singapore, said the new platform would address fragmentation of the industry, as different banks and brokers have developed their own variable practices for trade matching and settlement.
«With STACS, we hope to reduce these cumbersome and risky processes whilst achieving data transparency and security. In addition, we will be able to collaborate with our partners to build dynamic ecosystems, better operational intelligence, analytics, and audit readiness,» Ng said in the statement. «This would enable asset managers to channel their efforts towards truly high value-adding activities instead of manual workload.»
Handling sophisticated trades
Moving forward, the platform will develop the ability to handle more sophisticated trade exceptions, the statement said.
Hong Kong-based CSOP Asset Management was the first offshore entity set up by a regulated Chinese asset manager; it is a retail licensed fund management company with the Monetary Authority of Singapore (MAS). CSOP Asset Management issues exchange-traded funds on the Singapore Exchange and has fund vehicles for alternative investment strategies.
CSOP Asset Management had around $10.1 billion in assets under management as of end-2020, according to its website.
STACS has previously provided its digital ledger technology (DLT) in tie-ups with global banks, stock exchanges and asset managers. The MAS and STACS have tied-up to work on the Project Greenprint ESG registry, a DLT-based platform to track ESG data.