IBM is trialling a data blockchain solution for European SMEs with the London Stock Exchange Group and Borsa Italiana.
The project plans to digitise securities certificate data to simplify issuance and management of shareholding information.
Eventually it may help expand SMEs' access to credit and enable shareholder data exchange.
"Through our work with IBM on this blockchain solution, Borsa Italiana is taking the lead in transforming the way European SMEs can manage their shareholder data and at the same time expand credit access - all on a trusted digital platform," said Raffaele Jerusalmi, CEO, Borsa Italiana.
The blockchain solution for unlisted SMEs in Europe is designed to replace the paper trading certificates that are commonly issued to private companies today.
With a more digitised, streamlined and transparent process enabled by the blockchain solution, various parties - including issuers, regulators and investors - will have increased insight into company information. The solution is undergoing an initial test phase with a small group of partners and clients.
Traditionally, private SMEs lack access to public stock exchange networks or formalised credit structures. With this solution, SMEs in Europe can better access credit and link into a broader and more mature investor ecosystem, enabling them to set up new trading networks and obtain funding by sharing financial data in a security-rich and transparent public arena, it says.
By implementing the blockchain solution, Borsa Italiana is taking the lead in transforming how private companies can exchange and bring transparency around shareholder data and expand credit access.
"LSEG is testing the use of blockchain technology in a financial business network where data segregation and confidentiality is vital. By working with IBM, a pioneer in building enterprise-class blockchain solutions, we are committed to building, testing, and scaling our capabilities in emerging technologies over time," said Chris Corrado, Group COO and CIO, London Stock Exchange Group.
Built on Hyperledger Fabric version 1.0, a blockchain framework and one of the Hyperledger projects hosted by The Linux Foundation, the system is designed to help ensure that highly sensitive securities data can be shared amongst permissioned network participants while remaining secure and gated.
This blockchain solution, developed in collaboration with IBM, is built on highly secure infrastructure technology with the highest levels of encryption commercially available Evaluation Assurance Level certification of EAL5+. The solution is also built to achieve interoperability with LSEG's existing systems, promoting efficiency and business continuity.