Platform eliminates and streamlines bespoke trade matching parameters, resolving trade exceptions in real-time for asset managers
SINGAPORE–(BUSINESS WIRE)–CSOP Asset Management Pte. Ltd. (‘CSOP’) and leading Singapore FinTech firm, Hashstacs Pte Ltd (‘STACS’) today announced the completion of their Over-the-Counter (‘OTC’) Derivatives Trade Processing prototype, built by STACS on its Distributed Ledger Technology (‘DLT’)-based platform, Vetta. Set in the context of the Asset and Wealth Management industry, the teams collaborated closely over the course of two months to build a blockchain-powered platform that allows for automated concurrent processing and real-time, perpetual reconciliation of OTC derivatives trades. The adoption of DLT and smart contracts in this collaboration aims to enable new market opportunities and operating models, eliminating long-standing inefficiencies well-recognised in the industry and improving risk management.
This is part of the long-term collaboration between STACS and CSOP to deploy a live solution for efficient OTC trade processing across different asset classes. The platform aims to eliminate and streamline bespoke trade matching parameters and resolve trade exceptions in real-time.
The collaboration is supported by the Investment Management Association of Singapore (IMAS), the national representative body that spears the development of the fund industry in Singapore.
The platform was successfully delivered over sprints within two months, where trades were captured on the STACS blockchain immutably to provide trade participants with a single source of truth. Smart contracts were also deployed to automate and streamline the matching of trade parameters between CSOP and its counterparties.
Further enhancements of the platform in the pipeline include handling more sophisticated trade exception workflows and enabling the seamless resolution of trade breaks. Given that the OTC trades are highly bespoke and unstandardised, the collaboration would also see the incorporation of machine learning algorithms and optical character recognition technology to facilitate automatic data ingestion and transformation of unstandardised and unstructured trade parameters. Visibility of incoming trades will also be provided to both parties, with each transaction record being stored in an audit log, thus increasing transparency and auditability of data.
Future phases would move beyond trade matching to also facilitate the seamless settlement of trades. Ultimately, STACS and CSOP aim to push the industry frontier on OTC trade processing, by incorporating a wider ecosystem of market participants on this industry-wide platform interoperable with existing systems, to alleviate the financial industry from the extensive operational burden in times of trade volatility and to allow the industry to collectively benefit from the adoption of new technology to solve key challenges in trades processing and reap new strategic business opportunities.
Benjamin Soh, Managing Director at STACS, said: “We are thrilled to be part of this collaboration with CSOP Asset Management to deliver a cutting-edge live functional platform for efficient OTC Derivatives Trade Processing via distributed ledger technology. The solution enables efficiencies, risk management, servicing capacity, and an overall increase in profit for all market participants, while ensuring cross-platform interoperability and adherence to international standards of information security. This is definitely a meaningful collaboration that can create vast value and opportunities for the asset management industry and capital markets as a whole.”
David Ng, Deputy CEO at CSOP Singapore, said: “Partnering with STACS on this platform will allow CSOP to address the huge fragmentation across the entire industry, where different banks and brokers have developed their own set of varying practices along the entire trade matching and settlement process. With STACS, we hope to reduce these cumbersome and risky processes whilst achieving data transparency and security. In addition, we will be able to collaborate with our partners to build dynamic ecosystems, better operational intelligence, analytics, and audit readiness. This would enable asset managers to channel their efforts towards truly high value-adding activities instead of manual workload, as well as to equip and familiarise themselves with new technologies for a more digital future.”
As the blockchain platform provider, the leading Singapore Environmental, Social, and Governance (‘ESG’) finance and capital markets FinTech firm, STACS, provided its DLT platform as well as vast domain expertise, from its ongoing partnerships1 with leading global banks, stock exchanges, and asset managers. The Monetary Authority of Singapore (MAS) and STACS recently released a prominent partnership announcement on building the Project Greenprint ESG Registry, a DLT-based platform that provides accessibility to quality ESG data of various industry sectors, and enhances the mobilisation of ESG capital. This Greenprint ESG Registry forms the core of STACS Vetta platform, which enables effective Sustainable Finance for financial institutions and corporates of any size.
STACS (Hashstacs Pte Ltd) is a Singapore FinTech company focused on ESG FinTech, in partnership with the Monetary Authority of Singapore (MAS) for the Project Greenprint ESG Registry. STACS serves as the Nexus of ESG Finance with its live blockchain infrastructure that enables effective Sustainable Finance, and unlocks value in Asset and Wealth Management and Digital Securities. Its clients and partners include global banks, stock exchanges, asset managers, and corporates. STACS is The Asset Triple A Digital Awards 2021 FinTech Start-Up of the Year, an Award Winner of the MAS Global FinTech Innovation Challenge Awards 2020, and also a two-times awardee of the Financial Sector Technology and Innovation (FSTI) Proof of Concept (POC) grant, under the Financial Sector Development Fund administered by the MAS.
About CSOP Asset Management Pte. Ltd. (CSOP)
In 2008, CSOP Asset Management Limited (“CSOP”) was founded in Hong Kong, becoming the first offshore entity set up by a regulated Chinese asset manager. After more than a decade’s development at the gateway of China, CSOP extended its business to Singapore, making the China investment closer to investors in Singapore and the region. CSOP Asset Management Pte. Ltd. is a Retail Licensed Fund Management Company with the MAS. Its key business activities are the issuance of ETFs listed on the Singapore Exchange and Singapore Domiciled Fund vehicles which house alternative investment strategies such as quantitative index based investment strategies.
1 In 2021, STACS announced its partnership with financial institutions including (in alphabetical order) Aviva Singlife, BNP Paribas Securities Services, Bursa Malaysia, Citi, Deutsche Bank, Eastspring Investments, InvestaX, Mastercard, OCBC Bank, UBS, Union Bank of the Philippines, and UOB, as well as corporates from various sectors.
For further information:
Grace Lim, Marketing Manager
Phone: +65 8511 7770
CSOP Asset Management Pte. Ltd. (CSOP) (http://www.csopasset.com/sg/home.html)
Chow Da Jun, Director
Phone: +65 6279 2809