Borsa Italiana, a member of the London Stock Exchange Group, has announced it is building a blockchain solution with IBM focused on digitising the issuance of securities for SMEs.
The system will create a shared registry of all shareholder transactions, simplifying the tracking and management of information and opening up new opportunities for trading and investing.
The solution, which is aimed at unlisted European SMEs, aims to replace the current system of paper trading certificates. Using blockchain technology will allow all parties involved in the process, including issuers, regulators and investors, to have better insight into company information.
Borsa Italiana CEO Raffaele Jerusalmi says the company is leading the way in “transforming the way European SMEs can manage their shareholder data and at the same time expand credit access.”
Secure and open
In the current system private SMEs do not have access to public stock exchange networks or formalised credit structures. The solution hopes to give these companies a link to a broader ecosystem of investors. This should allow companies to set up new trading networks and gain funding by sharing their financial data in a secure and transparent public space.
The solution is built on Hyperledger Fabric 1.0, which IBM believes is best suited to ensure that the highly sensitive securities data can be shared in a way that protects all parties. The solution is also built to exchange information with London Stock Exchange Group’s current systems.
“The London Stock Exchange Group is testing the use of blockchain technology in a financial business network where data segregation and confidentiality is vital. By working with IBM, a pioneer in building enterprise-class blockchain solutions, we are committed to building, testing and scaling our capabilities in emerging technologies over time,” said Chris Corrado, Group COO and CIO, London Stock Exchange Group.
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