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The London Stock Exchange Group (LSEG), a United Kingdom-based provider of financial markets data and infrastructure, has launched a blockchain-based infrastructure platform for private funds. It is the first major global stock exchange to implement such a system, and the platform has already helped facilitate its first transaction.
The Digital Markets Infrastructure (DMI), as the platform is called, is powered by Microsoft Azure and covers the full lifecycle of digital assets across multiple asset classes, from issuance, tokenization, and distribution to post-trade asset settlement and servicing.
In its announcement, LSEG said that the DMI platform was developed in collaboration with Microsoft (NASDAQ: MSFT) and provides interoperability between current market solutions in distributed ledger technology (DLT) and traditional finance (TradFi).
The platform is part of LSEG’s ongoing goal of becoming the first global exchange group to support customers across the “full funding continuum.”
“DMI adopts an open and interoperable philosophy,” said LSEG on Monday. “It brings together participants from across the international market to broaden distribution, raise capital, increase liquidity, and service assets within a trusted and regulated environment.”
According to LSEG, by digitizing the issuance and discovery process, the DMI platform benefits investors by improving the time and cost efficiency of deal discovery, sale process, and fund discovery processes.
Private funds are the first asset class to benefit from the DMI platform and, as part of the initial offering, funds admitted to DMI will be discoverable on LSEG’s ‘Workspace’, a database that provides access to company financial data, economic indicators, news, analytics, and productivity tools.
“Private funds are a hugely important part of the market, yet the landscape remains fragmented,” said LSEG. “There is significant potential to enhance investor reach, streamline processes, and unlock critical data currently embedded in static documents.”
The first clients to join the new platform were MembersCap, an investment manager, and Archax, a Financial Conduct Authority (FCA)-registered digital asset exchange, brokerage, and custodian. According to LSEG, both have already been onboarded and the first transaction facilitated.
EJF Capital has also been onboarded as an early adopter, and a selection of its funds will soon be available on the platform.
“The onboarding of our first clients and this first transaction are significant milestones, demonstrating the appetite for an end-to-end, interoperable, regulated financial markets DLT infrastructure,” said Dr. Darko Hajdukovic, Head of Digital Markets Infrastructure at LSEG, adding that, as a convener of markets, LSEG “can bring significant scale to digital assets and effect real change.”
This sentiment was echoed by Bill Borden, Corporate Vice President of Worldwide Financial Services at Microsoft, who said the collaboration on DMI was “a powerful example of the innovation driving our strategic partnership.”
LSEG said it would continue partnering with Microsoft to develop and scale the platform, with expansion to additional asset classes planned.
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