Local stock exchange ZAR X, in conjunction with Adhara and Computershare South Africa, has launched the first distributed settlement system for unit trusts in South Africa.
Using the blockchain, it enables the public to purchase and settle unit trusts directly from fund managers in a secure environment.
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.
The new blockchain 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.
The project will go live in the last quarter of this year and will be available on the ZAR X website and the ZAR X Mobi App.