London, 15 July 2016: SETL, the London based institutional payment and settlement infrastructure based on blockchain technology, announced the completion of its first round of private fundraising today.
SETL also announced additional appointments to its board. Rachel Lomax, former Deputy Governor of the Bank of England and Ed Richards, former CEO of Ofcom, join the SETL board, following the appointment of Sir David Walker as SETL Chairman in December 2015. The company will also shortly announce the name of a further appointment to the Board, who is an experienced executive board member and non-executive in government, including at agencies in the national security sector.
SETL was launched in July 2015 to deploy a multi-asset, multi-currency institutional payment and settlements infrastructure based on blockchain technology. The SETL system will enable market participants to move cash and assets directly between each other, facilitating the immediate and final settlement of market transactions. The SETL system maintains a permissioned distributed ledger of ownership and transaction records, simplifying the process of matching, settlement, custody, registration and transaction reporting.
Since launch, SETL announced a breakthrough in technology, allowing the platform to process over 1.4bn transactions per day; launched their blockchain-powered OpenCSD platform, enabling market participants to run permissioned registry service for payments, settlement and clearing of cash and other financial instruments; and demonstrated Australia’s first working blockchain solution in collaboration with Computershare.
SETL’s Chairman, Sir David Walker, said: “This is a milestone in the development of SETL and one which I believe strengthens the company’s position significantly. At this stage in the company’s growth it is important to choose the right partners and to deliver a dependably resilient product to the market.”
Sir David Walker continued: “We are also delighted to confirm further appointments to the board. Joining as non-executives are Rachel Lomax and Ed Richards. Each of these directors brings a wealth of experience in the financial, regulatory and corporate governance spheres. Their oversight of the growth and development of SETL will be invaluable to the executive team and shareholders alike”. SETL is very mindful of the dependability and resilience of its systems and interfaces and we are delighted to welcome a further colleague to add counsel to the board, regulators, customers and shareholders.
Peter Randall, CEO of SETL, added: “We are pleased to announce that we have closed fundraising with initial partners and have agreed scope on a number of projects. With the recent announcement of our OpenCSD product, the completion of the funding arrangements and our board appointments, I am excited about developments ahead.
We believe we have a technological lead in this area having demonstrated the ability to process billions of transactions a day and are unique in having a financial grade product on the shelf and ready to go. We have already received significant indications of interest in the OpenCSD product and are in the process of choosing the initial implementation cases”.
Randall concluded: “I do not underestimate the challenges of re-tooling some of the most fundamental elements of our financial infrastructure but the benefits of doing so are significant and widespread. We are strongly positioned to commence that transformation and look forward to making further announcements shortly.”
SETL OpenCSD enables market participants to run permissioned registry service for payments, settlement and clearing of cash and other financial instruments
London, 1 June 2016: SETL, the institutional payment and settlement infrastructure based on blockchain technology, has today announced the launch of its blockchain-powered OpenCSD platform. The OpenCSD platform, SETL’s first commercial offering, enables any market participant to commission and run a permissioned registry service for payments, settlement and clearing of cash and other financial instruments. The platform is available today and powered by the SETL blockchain technology, which has been benchmarked to settle billions of transactions a day in real-time.
Peter Randall, CEO of SETL, said: “The time has come to stop talking about the characteristics of blockchain and to start realising its promise. Our OpenCSD platform will revolutionise the way securities depositories and payments systems are organised. A group of participants can now permission a working blockchain platform in a matter of minutes and jointly record and settle changes in ownership. This will help bring competition into a segment of financial markets which has thus far been dominated by quasi-monopolistic incumbents.”
SETL’s OpenCSD platform has been designed to be compatible with existing and forthcoming regulations such as the European CSDR, but is not specific to any particular regulatory model and, as such, is jurisdictionally agnostic. The OpenCSD platform builds an organisational functionality on top of the SETL blockchain engine.
The OpenCSD functionality comprises four main components: 1) a permissioned membership structure; 2) a range of control functions including clearing, settlement and corporate actions; 3) liquidity functionality including collateral and repo facilities; and 4) a secure messaging system which can be used to transmit ISO messages as well as enable bespoke communications between participants in a highly secure environment. Furthermore, the OpenCSD functionality will provide granular identity services by enabling participants to use industry initiatives, such as the Legal Entity Identifier (LEI) system, to allow authority and transaction management. Use of the OpenCSD platform in some applications in some jurisdictions will require prior regulatory approval.
The OpenCSD platform will enable the interaction of different participants, including custodians, registrars and payment institutions. It can be used co-operatively or deployed by a single institution to maintain registers for their own customers. It is asset neutral and works across securities, private equity or as a platform for FX or e-money. Assets held on one instance of the platform can be transferred to other instances subject to the agreement of both parties.
Peter Randall, CEO of SETL, continued, “The OpenCSD platform heralds a new era of interoperability, efficiency and flexibility for issuers and asset owners alike, to collaborate and establish their own settlement destinations. It is a means for market participants to empower themselves and to design services around their own needs and cost expectations. We envisage service providers plugging into these projects to provide facilities such as issuer support, payments and valuation. We expect to work with a number of companies in these areas to support these initiatives.”
The SETL OpenCSD platform is available on a subscription basis and is accessible through a secure user interface and via a functionally-rich API. SETL expects to take on a limited number of subscribers for the first phase of the roll-out. In addition, SETL will establish a development partner programme, which will engage with financial technology companies who wish to design and build functionality around the OpenCSD platform.
Computershare (CPU: ASX) and SETL have today demonstrated Australia’s first working blockchain capital markets solution at Computershare’s annual Investor and Analyst day. The two companies are also pleased to announce a joint initiative to establish securities ownership registers using blockchain technology.
Computershare is the globe’s leading provider of share registrar and receiving agent services to issuers and plays a crucial role in maintaining accurate and complete records of securities including both dematerialized and certificated ownership. SETL is a firm dedicated to bringing blockchain technology to the post-trade environment and has developed its offering to provide financial-grade solutions – including identity, permissioning, smart-contracts and scalability.
The joint initiative will focus initially on the Australian market and will examine the practicalities of establishing an immutable register of securities ownership using blockchain technology. Computershare will play the lead role in bringing together issuers, asset owners, brokers, regulators and market infrastructure providers to propose an open platform which meets the needs of all industry participants. SETL will provide its blockchain technology and expertise to establish a financial-grade solution for this initiative in Australia.
“Computershare is uniquely placed to appreciate how blockchain technology will be specifically applied in maintaining ownership registers. We are already the keeper of definitive legal ownership - the ‘Golden Record’ - for our issuer clients and their stakeholders,” stated Paul Conn, President of Global Capital Markets for Computershare.
“We chose to work with SETL because they have demonstrable working technology coupled with a deep bench of financial services expertise and experience.”
Peter Randall, the CEO of SETL stated: “We are excited to be working with Computershare on this joint initiative. They have an unrivalled position in understanding the needs and requirements of issuers and owners alike. Their focus on client servicing and their understanding of the lifecycle of securities issuance and ownership makes them natural leaders in this field.”
The initial phase will engage a broad group of participants and will be used to build on SETL’s existing working prototype for transferring ownership of securities. The result is expected to be an open platform which can meet a variety of needs including those of issuers, owners, brokers, custodians, regulators, market infrastructure providers and registrars.
SETL, the UK based institutional payment and settlement infrastructure based on blockchain technology, has today announced the appointment of Sir David Walker as Chairman.
Sir David Walker is a former Executive Director of the Bank of England and has served as the chairman of Barclays, Morgan Stanley International, the Securities and Investment Board and as deputy chairman of Lloyds TSB. Before his career in financial markets, Sir David served as an Assistant Secretary to the Treasury, for the UK Government. Sir David Walker is a senior member of the influential G30 group which considers and promotes advancements in international payments and settlements.
Commenting on his appointment, Sir David Walker said: ‘I am very pleased to accept this position with SETL. Blockchain is an important advance in settlement technology and SETL has a compelling proposition for its deployment. By simplifying the process of payments and settlement SETL should be able to deliver significant operational efficiencies which will benefit all market participants and, most importantly, reduce costs borne by savers and investors.’
Peter Randall, who has led the establishment of SETL with Anthony Culligan, said: ‘Sir David Walker has an unrivalled depth of experience in finance and his guidance in this project will be invaluable. We are excited to have him accept this post as it strengthens our proposition immeasurably. Sir David will take an active role in leading the board and will support the executive team in their implementation of this new and exciting technology.’
Today, SETL also announced the appointment of Professor Philip Bond as head of their Cryptography and Cyber Security committee. Philip Bond is visiting Professor in the Departments of Engineering Mathematics and Computer Science at Bristol University, specialising in cryptography. He is also a Visiting Fellow in the Oxford Industrial and Applied Mathematics Centre (OCIAM) at the University of Oxford. He has degrees in Physics, Applied Non-Linear Analysis, Finance and Pure Mathematics. Professionally, he has worked as an arbitrage trader at a number of city institutions.
Professor Bond will draw together the leading expertise in cryptography and computer security to form an advisory committee which will assist in the design and implementation of the cryptographic methods to enhance the privacy, security and robustness of the SETL technology.
Both appointments are to commence when SETL has completed its fundraising. Also today, SETL announced that its fundraising efforts will be managed by Caroline Silver at the specialist investment bank Moelis & Company. Moelis & Company, founded by Ken Moelis in 2007, employs 450 bankers in 17 offices worldwide and has specialist expertise in the financial sector, capital markets, mergers & acquisitions and restructuring. Caroline Silver recently advised on the $2.2bn sale of London Metal Exchange and on $8.2bn sale of NYSE Euronext.
SETL, the institutional payment and settlement infrastructure based on blockchain technology, has today announced that it has established a test network which has broken the 1 billion transactions-per-day capacity barrier for blockchain movements.
SETL also gave more detail of its technology strategy, revealing it had developed novel techniques, to allow it to process transactions in a parallel and effectively remove practical constraints on volume. Anthony Culligan, the SETL CEO, stated, "We are determined to stay on the front foot in technology development and will continue to incorporate the best techniques in our developments. We have a laser focus on financial services ". Culligan further added, "We are not running on a third party platform or powered by an off-the-shelf technology. We develop at the source code level to give us absolute control over how we can deliver our service. Less than 0.5% of our current codebase is licenced technology. This announcement demonstrates the benefits of the approach."
SETL announced its plans to deploy a multi-asset, multi-currency institutional payment and settlements infrastructure based on blockchain technology in July 2015 and is currently in discussion with more than 40 financial institutions including leading banks and infrastructure providers to create a cross-industry solution. The SETL system is designed with financial markets users in mind and will enable market participants to move cash and assets directly between each other, facilitating the immediate and final settlement of transactions. The SETL system maintains a permissioned distributed ledger of ownership and transaction records, simplifying the process of matching, settlement, custody, registration and transaction reporting.
According to the CapGemini/RBS World Payments Report 2015, total non-cash payments globally, including all wholesale and retail electronic payments, amount to 389bn per year, equivalent to 1.06bn movements per day. The top 10 payments markets including North America, the Eurozone, UK, Brazil, China, Japan, Russia and Australia amount to approximately 300bn payments a year or 0.8bn a day. By exceeding 1 billion transactions per day, SETL is addressing one of the fundamental issues of legacy blockchains, which, unlike SETL, are not designed for financial markets and are unable to handle market volumes.
Peter Randall, COO of SETL, said: “We are very excited to break through the 1 billion transactions per day barrier and to be the first to demonstrate that the SETL blockchain can handle the volumes required by the financial services industry, where speed, capacity and reliability are crucial. Our processing capacity now exceeds the volume of every electronic payment made globally on a live-time gross basis. In collaboration with our partners, we know that we have a significant project ahead of us; today is a milestone in this process of bringing a scalable blockchain solution to the world of payments and settlement.
The network deployed by SETL is running across a set of nodes in the UK and Europe and comprises a number of interlinked and communicating blockchains. Assets deployed on one chain can be transmitted to others via a ‘witness node’ which has a presence on the sending and receiving chains.
Anthony Culligan, CEO of SETL, added: “Markets are often segregated by function, jurisdiction and purpose. In addition to the significant performance gains, our development of the witness node technology allows us to create closed groups of participants who have a shared purpose, enabling them to move assets to and from the wider financial world.”
SETL today announced its plans to deploy a multi-asset, multi-currency institutional payment and settlements infrastructure based on blockchain technology. The SETL system will enable market participants to move cash and assets directly between each other, facilitating the immediate and final settlement of market transactions. The SETL system maintains a permissioned distributed ledger of ownership and transaction records, simplifying the process of matching, settlement, custody, registration and transaction reporting.
The initiative is led by Peter Randall, the former CEO and founder of Chi-X, the pan-European equities trading venue, and Anthony Culligan, an experienced hedge fund investor and CEO and founder of Roolo, a peer-to-peer bitcoin trading site committed to bringing bitcoin and blockchain technology into mainstream use in the City. The SETL management team comprises Anthony Culligan, CEO; Peter Randall, COO; Nicholas Pennington, CTO; and Francois Barthelemy, Head of Corporate Strategy.
Today’s post-trade environment is plagued by the existence of a large number of disparate systems, each of which requires market participants to maintain a plethora of interfaces and reconciliation procedures. The total cost to the finance industry of clearing, settling and managing the post-trade environment is estimated at between $65bn and $80bn per year . The hierarchical nature of the current environment requires investors to employ specialist agents at every step of the clearing and settlement process, increasing cost and complexity. By removing the need for multiple ledgers, multiple single points of failure and multiple processing bottlenecks SETL will result in very significant processing speed improvements and at the same time remove multiple cost layers for the benefit of all participants.
Alongside this, regulators are demanding greater transparency of ownership and immediate transaction reporting to allow them to detect market abuses and to monitor, in real time, systemic market risks. The SETL blockchain solution is completely compatible with existing regulatory initiatives and in particular has been designed to accommodate new requirements such as LEI (Legal Entity Identifier) fields.
The SETL system has been designed from the ground up to meet the needs of the finance industry and eliminate some of the concerns raised about the use of blockchain technology for financial markets. These include anonymity, typical for ‘permissionless’ blockchains such as the bitcoin blockchain, which would present challenges to AML / KYC obligations of financial institutions, and the limited capacity and speed of current blockchains, not designed to handle the required volume of financial transactions. SETL is a real-time, real-world system and as such will offer connectivity and compatibility with existing work flows, systems, standards and regulations.
With SETL, users will deploy public/private key technology to assert transactions. However, where the bitcoin blockchain is limited to only 7 transactions per second globally, the SETL infrastructure has demonstrated speeds of up to 5,000 transactions per second in tests and is expected to reach speeds of 100,000 transactions per second in an enterprise environment. Such speeds are achievable because SETL will operate on a ‘permissioned’ basis rather than the ‘permissionless’ environment bitcoin operates in. The SETL system will require that each public key used is certified by one of a number of entities that will undertake due diligence and will tie each key back to an LEI. This will ensure that regulators and other parties that have a legitimate interest will be able to identify the underlying users. In addition, external parties such as regulators, auditors, issuers and other interested parties will have full real-time transparency of relevant transactions.
The SETL business case shows solid revenue flows and is intended to act as a ‘beacon’ for UK and European institutions to coalesce around. Most financial institutions will be able to operate both as providers and consumers.
Peter Randall, COO, who is credited with revolutionising the equity trading markets in Europe through the establishment of Chi-X Europe, said: ‘With SETL, we aim to do to the post-trade environment, what we did to exchange trading with Chi-X. Clearing and settlement processes are fragmented, cumbersome, costly and in need of technological innovation and simplification. We are currently in discussion with a number of first tier institutions who are looking to commercialise blockchain technology. Our aim is to be platform, exchange, currency and asset agnostic. When you have agreed a transaction, SETL will be the way to simultaneously move the consideration and the asset as well as provide a ‘golden record’ of the transaction.
Anthony Culligan, CEO, added: ‘Our industry needs a blockchain technology designed specifically with the requirements of financial markets in mind. Retro-fitting to the bitcoin blockchain using add-ons such as the Open Asset Protocol is a technical non-starter as it does not have the capacity or functionality to properly service financial markets. Understanding how financial markets work has been key to the design process so far. Solutions in the world of finance need to address practical issues such as capital usage, bank liquidity and regulatory permissions. SETL is the product of the decades of financial markets expertise of its founders as well as genuine technical innovation’.
Peter Randall will be spearheading the SETL initiative as SETL’s CEO. Credited with revolutionising the equity exchange market in Europe through the establishment of Chi-X Europe Ltd, Peter led the company’s growth as founder and CEO, from an unknown multilateral trading facility to become one of the top 5 trading venues in Europe by volumes traded. Subsequently, Peter was appointed CEO of Equiduct, where he restructured the business, and turned it into the fastest growing trading platform in Europe in 2012. Prior to Equiduct and Chi-X, Peter was COO at Instinet Europe Ltd, and Executive Director of FIX Protocol Ltd.
Anthony started his career as a programmer in the 1980’s. He deployed his skills in traditional finance as a quantitative fund manager, derivatives trader and an investor in complex hedge funds. His career spans directorships with Robert Fleming Securities, JP Morgan and Aida Capital; most recently, he was the CEO of F&C Partners. Anthony is a keen financial historian and commentator on monetary philosophy. Before establishing SETL, Anthony was the founder and CEO of Roolo, a peer-to-peer bitcoin trading site. Over the last 3 years Anthony has been committed to bringing blockchain and distributed ledger technology into mainstream use in the City.
As CTO, Nicholas Pennington leads the technological development for SETL. A long standing financial service professional with a successful track record in technology development and implementation, Nicholas has coded in the most extreme financial environments - on the desk, as a trader, dealing in live time and with significant institutional capital at risk. Previously, Nicholas has held senior positions at Robert Fleming Securities, JP Morgan, Powe Capital and F&C Partners. He was a founding member and CTO of Roolo and also a founder of SETL.
Francois Barthelemy is a consultant advising a number of large asset management firms in Paris and London on corporate strategy. From 2011 to 2013 he was CEO of Primonial Asset Management. Prior to that he held positions at Robert Fleming Securities, Morgan Stanley and was a Founder and Senior Partner at F&C Partners LLP. Francois was a founding investor at Roolo and a founder of SETL.