CACEIS is the first asset servicing group to obtain Digital Asset Service Provider (DSAP) status in France, and plans to extend its existing service offer with a fund unit tokenisation solution that opens up Blockchain-based distribution possibilities.
CACEIS’ Digital Assets division is developing an innovative fund unit tokenisation offer with a Blockchain distribution solution that uses a hybrid Transfer Agency (TA) model. The TA model will combine traditional methods of recording fund unit ownership alongside tokenised units created in the Blockchain that are accessible via digital wallets.
A turnkey distribution solution for tokenised fund units
The one-stop shop distribution approach will use an innovative digital platform that is initially designed for French and Luxembourg domiciled funds. The hybrid model paves the way for traditional fund units to be combined with Blockchain-based tokenised fund units, thereby offering a dual solution for clients.
An innovative hybrid distribution model
“Our hybrid TA solution uses Blockchain interfacing technology combined with the usual connections to distributors and the traditional market infrastructure, thereby providing clients with the most comprehensive model possible.” explains Sorin Jitaru Digital Assets expert at CACEIS.
The model is designed to work seamlessly for traditional investors and distributors, while catering to Blockchain-only Web3 investors and hybrid investors who seek to combine both strategies.
A cutting-edge platform
The offer uses a technology platform that is tightly integrated with CACEIS’ custody and administration systems, guaranteeing consistency of services across the board. This is a particularly important aspect for generating investment management and investor reports, for managing risk and compliance aspects, and for ensuring IT security.
CACEIS’ TEEPI platform lies at the heart of the model and is undergoing feature upgrades that will enable online account opening, wallet allocation, digital KYC management and online order placement.
Digital wallets for tokenised units
“Wallets for tokenised units together with registration services on public blockchains provide an alternative to traditional investment registrars. We perform a rigorous verification process that can even permit investors to use their own pre-existing digital wallets" explains Sorin Jitaru.
On-blockchain holdings show up automatically in CACEIS’ traditional IT systems, enabling us to provide the same accurate and transparent reporting as enjoyed by traditional assets - and with no impact on clients’ day-to-day activity. Investors benefit from full traceability of their fund units due to Blockchain’s inherent transparency and the use of public keys.
Creating the secondary market for Private Equity funds
The Digital Assets division is also working on developing the secondary market for Private Equity funds. Tokenisation of units will allow the sale and purchase of previously illiquid units, thus providing liquidity for existing investors and opening up the secondary market to investors who were previously unable to access private equity investments.
