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Global Markets Operator ICAP Successfully Implements Blockchain Technology Pilot

by: Joseph Young

Global Markets Operator ICAP Successfully Implements Blockchain Technology Pilot

ICAP, a leading markets operator and provider of post trade risk mitigation and information services with more than $1.6 billion in revenue, announced that its Post Trade Risk and Information (“PTRI”) division has successfully carried out a proof-of-technology pilot test using blockchain technology.

The ICAP PTRI division plans to use its newly developed proof-of-technology protocol to handle post-trade processing, a process in which the buyer and the seller compare trade details, alter ownership records, transfer securities and cash and approve transactions.

The foundation and infrastructure of ICAP’s blockchain technology-based proof-of-technology protocol is developed by a New York-based technology firm called Axoni

By using Axoni’s pre-developed blockchain-based system and the Harmony network’s multi-asset messaging and matching platform, the ICAP proof-of-technology protocol imports matched messages from the Harmony network and converts them to store the asset data on their blockchain network through smart contracts. 

The ICAP PTRI division successfully carried out its first official test of its blockchain-based proof-of-technology protocol with nine representative participant nodes on their blockchain network. 

During the pilot test, the PTRI team stored the imported asset data from the Harmony network onto the blockchain network using smart contracts. The smart contracts were then distributed to the nine participant nodes that had the ability to execute traditional post-trade processing settlements such as trade valuation, compression, verification and reporting. 

“In successfully completing a proof of technology test, ICAP has demonstrated one of the first real world applications of distributed ledger technology that has the ability to significantly transform the post trade landscape,” announced the ICAP PTRI division’s CEO Jenny Knott

“Realizing the value of ICAP’s unique portfolio of PTRI businesses and investee companies, we have combined our expertise, networks and technology with Axoni’s distributed ledger technology to push the boundaries of post trade innovation,” she continued.

The pilot test of the proof-of-technology protocol demonstrated its potential in optimizing many conventional services in the finance sector.  The ICAP PTRI division outlined that its technology has the potential to execute the following services:

  1. Provide a common golden source of user transaction and reference data cross asset;
  2. Enrich and enhance the accuracy and timeliness of data by users and attach further information;
  3. Continuously update copies of the data to be stored locally on users’ servers;
  4. Securely code messages to be viewed only by permissioned participants;
  5. Reduce operational risk and improve reconciliation and operations processes
  6. Realize multiple back office and technology cost savings.

Marking the successful test of its proof-of-technology as a starting point, ICAP aims to use and distribute its proof-of-technology to maximize its potential in the traditional finance sector. In the next few months, the PTRI division will collaborate with the participants from the pilot test and assess the technology’s efficiency in supporting disparate financial systems. ICAP will also conduct research to evaluate the regulatory side of using a permissioned blockchain to enhance post-trade processing settlements.

Axoni, the company behind the proof-of-technology protocol of ICAP, is one of the financial technology startups funded by Euclid Opportunities, an early stage funding program of ICAP. Throughout 2016, ICAP’s PTRI division will continue to collaborate with Axoni to revolutionize post-trade processing with blockchain-based products and services.

“Partnering with ICAP was an easy choice,” said Greg Schvey, CEO of Axoni. “There’s no shortage of demand for distributed ledger projects. ICAP’s thoughtful consideration of where this technology can be most valuable, its ambitious deployment objectives, and market-leading client reach offer a high probability of success when combined with Axoni’s advanced blockchain infrastructure.”

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