CAPE TOWN – 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 local stock exchange said in a statement on Tuesday that using the blockchain would enable the public to buy and settle unit trusts directly from fund managers in a secure environment.
ZAR X chief executive Etienne Nel said since inception, ZAR X had pioneered technology and introduced innovative products and services to capital markets in the country.
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“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,” said Nel.
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.
Chief operations officer and co-founder of Adhara Peter Munnings said they were delighted to be part of this production-grade blockchain solution. “Adhara has used its Token+ product for this solution that is built on Hyperledger Besu – an open-source, enterprise-grade Ethereum client.”
Computershare South Africa chief executive Bennie van der Westhuizen said he was 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.”
A relatively new kid on the block as far as South African exchanges go, ZAR X, competes with the JSE as well as new entrants 4 Africa Exchange and A2X Markets.
The founders of ZAR X are Etienne Nel, who previously set up and operated an established over-the-counter (OTC) trading platform, and Geoff Cook and Graeme Wellsted, ex-Investec alumni who are experienced compliance and legal advisors.