Italian Stock Exchange, part of London Stock Exchange Group (LSEG), and IBM announced the development of a blockchain-based solution to digitize the issue of small and medium sized (SME) securities in Europe. Designed to simplify traceability and shareholder information management, the new system aims to create a shared and distributed register of all transactions between shareholders, to open up new trading and investment opportunities.
“Thanks to the collaboration with IBM in developing this solution, Borsa Italiana wants to take a leading position in transforming the way European SMEs can manage their shareholder lists and at the same time broaden access to credit – all On a reliable digital platform, “said Raffaele Jerusalmi, CEO of Borsa Italiana.
The blockchain-based solution for unlisted European SMEs is designed to replace paper-based certificates, which are usually issued to private companies today. Thanks to the blockchain technology – synonymous with a more digitized, agile and transparent process – stakeholders, such as issuers, supervisors and investors, will enjoy an informative and exhaustive overview of the companies involved in the initiative.
Usually, private SMEs do not have access to public stock exchanges or formalized (possibly institutional) credit facilities. With this innovation, European SMEs will benefit from enhanced credit access and a link with a wider and more mature investment ecosystem that will enable them to trace new trading lines and obtain funding by sharing their financial data in a ” Transparent and absolutely secure public arena. With the implementation of the blockchain solution, Borsa Italiana aims to lead a transformation path to help private companies change their trading patterns, increase transparency and expand access to credit.
“LSEG is testing the use of blockchain technology in a financial sphere so data separation and confidentiality are essential aspects. By working with IBM, pioneering the development of advanced blockchain solutions for the financial sector, we are committed to creating, testing and expanding our capabilities in emerging technology, “said Chris Corrado, Group COO and CIO of London Stock Exchange Group.
Based on the Hyperledger Fabric version 1.0 blockchain, the system ensures highly sensitive data sharing between authorized network participants, while guaranteeing security and protection. Developed in collaboration with IBM, this blockchain-based solution uses a highly secure infrastructure with the highest commercially available encryption levels. The solution is also designed for possible interoperability with existing LSEG systems, in terms of efficiency and business continuity.
“Sharing critical data in a secure and transparent network accessible to shareholders is difficult if you use a traditional system,” explained Marie Wieck, IBM Blockchain General Manager. “The blockchain will help eliminate some of the typical barriers to traditional value-transferring methods, just as the Internet did with the exchange of information in the late 1990s.”
The solution is undergoing initial testing at a small group of partners and customers.