Vanguard, in close collaboration with the Center for Research in Security Prices and technology provider Symbiont, is leading an effort to simplify the index data sharing process through innovative blockchain technology. This partnership between the three organizations will enable index data to move instantly between index providers and market participants over one decentralized database.
“Using this platform, investment managers will be able to instantly distribute, receive, and process index data, resulting in better benchmark tracking and significant cost savings that potentially results in better returns for our clients,” said Warren Pennington, a principal in Vanguard’s Investment Management Group.
Over the last several months, CRSP has distributed daily index data to Vanguard in a testing environment through Symbiont’s blockchain platform. Delivering the data via a blockchain and automating workflows with smart contracts has served to expedite data delivery, eliminate the need for manual updates, and reduce risks.
“Secure, timely, and reliable controlled distribution of highly sensitive and time-critical information is essential to the continued evolution of the investment and financial services environment. CRSP is dedicated to facilitating the healthy evolution of this marketplace through our data and projects like this,” said David Barclay, COO of CRSP.
Currently, index data transmission, which is essential to many operations within the financial services industry, including portfolio construction and strategy execution, relies on multiple parties and distribution channels to reach investment professionals.
“Through this collaboration, we were able to show how Symbiont’s blockchain technology and smart contracts can enhance market data distribution among disparate parties,” said Mark Smith, CEO and co-founder of Symbiont. “We’re pleased both Vanguard and CRSP were open to exploring new ways to use our platform to make capital markets cheaper, faster, and more accurate for investors.”
The success of this initial pilot will enable automation of CRSP index data delivery and intra-day updates over the private blockchain network in early 2018. Vanguard, Symbiont, and CRSP will also use the results of this initiative to influence future blockchain efforts.