Development is underway for a not-for-profit blockchain platform designed to facilitate regulatory and ESG reporting requirements while improving data flow for asset managers and distributors.
The Investing and Saving Alliance (Tisa), a UK cross-sector financial services body, has joined forces with tech firm Atos, which will develop the software allowing the recording and transmission of MiFIDII data with no latency.
According to the organisation, this type of information exchange is currently inconsistent in the industry, meaning firms often struggle to get hold of the data they need from other business to enable cost disclosures.
Employing blockchain technology, which is becoming steadily and increasingly implemented in the funds industry, the tool provides relevant parties real-time access to European MiFIDII templates.
Technical policy director Jeffrey Mushens said: “The impact will be substantial, for all types of firms working in this space, including the UK, the EU and Switzerland.”
Tisa – whose members include Aberdeen Standard Investments and Morningstar UK – also claimed that the blockchain tool will provide better consistency for fund managers when reporting ESG – or environmental, social and governance – obligations next year.
As ESG increasingly comes under the spotlight once more, its mettle put to the test by the Covid-19 crisis, Turn should also allow investors to take more informed investment decisions, Tisa stated.
“This is an industry-led and run, not-for-profit initiative that will ultimately ensure that consumers are offered the best and most suitable products,” Mushens added.
He went on to claim that this technology is “clearly a sought-after ambition” amongst its members, with whom it has been working alongside to address various data needs.
The launch of the blockchain platform has been announced just under three months since the three European Supervisory Authorities (the EBA, EIOPA and Esma – collectively known as the ESAs – opened a consultation on ESG disclosure standards for financial market participants, advisers and products.
After months of negotiations between EU member states and the European Parliament, an agreement was reached at the end of 2019 on what has been called the world’s first regulatory benchmark for green financial products.
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