Today Euroclear announced it is making a strategic investment in IZNES, the blockchain-based fund administration platform. Blockchain firm SETL and several French asset managers founded IZNES in 2017. Its platform allows institutional investors to interact directly with investment managers for the issuance and redemption of UCITS funds, with the blockchain providing the fund register.
Euroclear is one of several big names that have an interest in IZNES. It has ten shareholders mainly made up of asset managers, including Rotschild & Co, Generali, and SocGen Private Banking. Plus it has numerous high profile users such as Allianz, Aviva Investors, BNP Paribas Asset Managers and HSBC.
While IZNES started as a strictly institutional play, it has rolled out a B2B2C offering. Last year it partnered with a management firm to support intermediated distribution for consumer investors.
Meanwhile, Euroclear sees IZNES as enhancing its Euroclear FundsPlace offering, which provides an end-to-end solution for money market funds, alternatives and ETFs.
“We are convinced that the mutualisation of data and further automation of processes, supported by digital technologies, have a real potential to reduce the overall cost of funds distribution,” said Philippe Laurensy, Head of Product, Strategy and Innovation at Euroclear. “IZNES’ solution has already delivered benefits to its users and our partnership is a natural step to broaden its usage at a larger scale.”
About IZNES
IZNES is regulated by France’s Autorité Des Marchés Financiers (AMF) and ACPR. Additionally, its licenses are passported to Luxembourg, Ireland, Germany, Austria, and Belgium.
It leverages a private permissioned blockchain. For the first several years it used DLT technology developed by SETL. However, Colendi acquired SETL in 2022 and subsequently IZNES switched to Hyperledger Fabric. It claimed it wanted to use open source software to control the code fully. While highly regarded, far fewer people currently work on Fabric’s code compared to its peak when IBM had a dedicated team involved.
For its part, Euroclear is embracing blockchain. Last year it launched its new DLT platform, D-FMI, with the issuance of a bond by the World Bank.
