Fund administration firm Apex Group said it has tokenized the shares of a Maltese fund on the Polygon blockchain for the first time. The company has been active in tokenization for three years, since it acquired FundAdminChain.
For funds, blockchain can enable faster settlement and aid with transparency, given Polygon is a public ledger. By using smart contracts, it can help with automating the transfer agency process. There’s also the potential for fractionalization, enabling smaller minimum investment amounts, which allows a broader range of investors to participate. While it seems logical, not everyone is convinced that fractionalization is a massive benefit.
“We are proud to be the first financial services provider to launch a first of its kind share class from Malta. By leveraging tokenisation, we are enhancing operational efficiency as well as broadening the investor pool,” said Omar Cascun, Apex Group’s Country Head – Malta.
We’ve requested more details about the fund but didn’t receive a response in time for publication.
Apex has already been very active in tokenization. One of its clients is Hamilton Lane, which was amongst the earliest asset managers to embrace the technology.
Together they’ve been involved in multiple tokenizations, including one for a Luxembourg fund offered by Swiss bank Sygnum and a collaboration with funds distribution platform Allfunds Blockchain. There’s also a planned tokenization with Republic, the consumer facing platform, which recently enabled fractional exposure to Hamilton Lane funds in a conventional manner.
There’s a widespread recognition of the benefits of blockchain for transfer agency. Standard Chartered recently adopted the technology and was so impressed it is thinking about offering not just transfer agency services but reselling the FundsDLT powered platform as a solution.
