A Future of Finance webinar on November 30th from 2pm to 3pm UK time.
With Asset Managers, Custody Banks, Fund Administrator, Securities Infrastructure Companies and Technology Companies.
Tokenised funds exist already in the United States and Singapore. Asset managers are not only issuing tokenised funds but backing projects whose ambition is to facilitate the large-scale tokenisation of shares in mutual funds. What are the benefits they see?
What is the event about?
At this event, the coming tokenisation of the mutual funds industry will be discussed, in terms of the incentives to change, the techniques employed and the timetable by which it will proceed.
Whenever and however it happens, it will be a seismic transformation. According to the Investment Company Institute, there were at the end of June 2022 a total of 152,888 funds in existence around the world, worth a total of US$64.4 trillion.
And the case for change is powerful. Mutual fund managers face challenges of profitability which existing methods of efficiency – automation, outsourcing and offshoring – cannot solve.
It is why asset managers throughout the world – including eight leading organisations in London – are now investing in tokenisation, and not just of funds but of securities as a whole.
They sense that shifting funds on to a blockchain-based operating model will streamline the infrastructure that separates fund issuers from fund investors, cutting costs to the benefit of both.
It follows that existing intermediaries – such as transfer agents, fund accountants and fund platforms – must adapt their existing businesses to a tokenised future, or face extinction.
This event will explore the implications of tokenisation for all participants in the mutual fund industry: issuers, intermediaries and investors.
When is it being held?
November 30th from 2pm to 3pm UK time on zoom
Where is it being held?
The event will take place at: On Zoom
The issuance, distribution, trading and settlement of tokenised investment funds is happening already and is likely to spread throughout the mutual fund industry in the near future.
Anybody working at an asset manager, wealth manager, fund platform, transfer agent, order-routing network, fund administrator, depositary or custodian bank or paying agent needs to understand what is happening.
This event will explore why change is necessary; how tokenisation is implemented; what regulators think; where it is happening already; what the benefits are; and how and how soon it will happen.
What topics will be discussed?
- What incentives do asset managers have to switch to a tokenised fund model (e.g., reduced operational and distribution costs, improved investment performance, reach new classes of investor)?
- Which intermediaries (fund platforms, registrars/transfer agents, order-routing networks, fund accountants, depositary banks, custodian banks, paying agents) are most at risk of disintermediation?
- How should intermediaries threatened with disintermediation respond (e.g., Calastone and FinSwitch are building blockchain-based networks, custodian banks developing digital wallet services for investors)?
- How do regulators currently treat fund tokens (e.g., as securities) and payment tokens (e.g., as e-money or as Stablecoins) and what are the consequences (e.g., a UCITS fund cannot invest in unregulated assets)?
- What regulatory constraints does the tokenisation of funds face (e.g., under CASS, UCITS, AIFMD, the 1940 Investment Company Act and e-money regulations)?
- Is the limited regulation of the cryptocurrency and DeFi markets a constraint on making rapid progress in the tokenisation of funds?
- Which jurisdictions are most accommodating to fund tokenisation?
- To what extent is legal uncertainty (e.g., over the status of tokens and smart contacts) an obstacle to progress?
- How will fund events (e.g., income distribution, fee deductions, new share classes) be serviced?
- Does tokenisation make real-time Net Asset Value (NAV) calculations possible?
- Can Stablecoins and/or Central Bank Digital Currencies (CBDCs) help?
- Does it make sense for asset managers to issue Stablecopins?
- What are the consequences of introducing atomic settlement (which requires pre-funding) to the funds industry?
- Is netting of fund transactions ahead of settlement possible in a tokenised model?
- Will fund tokenisation networks be public or private/permissioned?
- What are the benefits for investors (e. g., wider range of investable assets, enhanced liquidity in illiquid asset classes, personalisation of portfolios)?
- Can compliance (e.g., AML, CFT and sanctions screening checks, distribution limitations, mis-selling checks) be automated by smart tokens embedded in tokens?
- In theory, secondary markets can replace fund issuers as way of exiting funds. Is tokenisation enough to create liquid secondary markets or will other steps be necessary?
- Can assets be tokenised as well as fund shares?
- Can tokenised funds be lent or used as collateral to raise credit?
- Can Exchange Traded Funds (ETFs) settle in tokenised form rather than in kind?
- What funds have been tokenised already – and where?
- What type of funds (e.g., ETFs, infrastructure funds, privately managed asset funds) are likely to tokenise first?
- Can funds be tokenised in one country – or must tokenisation proceed on a global scale (e.g., because funds are distributed globally)?
- Will existing funds migrate to a tokenised model or co-exist alongside tokenised funds?
- Can migration of existing funds be accomplished by adding tokenised share classes to existing funds?
- Will funds as we know them disappear and be replaced by personalised digital portfolios issued, traded and serviced entirely by digital means?
John Allan – Senior Adviser, Fund Innovation and Operations at the Investment Association
John supports IA member firms innovating their investment fund operational delivery to consumers, through solving operational challenges, applying emerging technology and evolving regulation. Prior to joining the IA, John held roles at BNY Mellon and BMO Global Asset Management in fund operations roles covering the UK, Ireland and Luxembourg.
Brian McNulty – Managing Director at FundAdminChain (FAC)
2019: Founded FAC (FundAdminChain – a blockchain based network for on-boarding, distributing, trading and servicing Traditional and Digital Funds). 2016-19: Managing Director, global head of services at R3 (an enterprise blockchain firm with the largest blockchain ecosystem in the world.). 2016: Founded appii.io: employee background and CV verification underpinned by blockchain. 2015 co-founder of PTDL (post trade distributed ledger group). 2011- exiting in 2016: Co-owner TraderMade International,: providing Trading and Technical Analysis software solutions to over 300 blue-chip banking customers. 2001- exiting in 2014: Founded DBFS Consultants specialising in buy-side/fund admin fintech, over 100 employees and 50 buy-side / fund servicing customers. 1990’s: Senior Derivatives Trader. Glasgow University: Honours Mathematics, Certified Technical Analyst , CISI.
David Moffat Senior Director – Proposition at SS&C Global Investor and Distribution Solutions
David leads business and proposition development, marketing and external affairs functions for SS&C Fund Services in the UK and Europe.
Born in Zimbabwe and educated in Scotland, David spent 20 years in the asset management industry with Fidelity, Threadneedle and JPMorgan before joining IFDS, now SS&C, in 2007.
David sits on a number of UK and European industry boards, committees and steering groups and is the current Chair of TeX, the industry standards setting body for the asset transfers in the UK.
Simon Barnby – CMO at Archax
Moderated by Dominic Hobson, Co-Founder Future of Finance
Dominic Hobson has worked for himself for 30 years. He was one of the founders of Asset International, a transatlantic financial publishing, events and survey business, which was sold in 2009.
Since then, Dominic has contributed to the work of two data businesses covering financial markets, run a peer group network for hedge fund managers, and co-founded the Future of Finance, which hosts events on innovation in finance.
As one half of Hobson Cardew, Dominic also provides consultancy services to a number of financial services businesses and market infrastructures.