UBS trials Ethereum platform for MiFID compliance

Tuesday 12 December 2017 13:28 CET | News

UBS, a large Swiss bank, has revealed a pilot designed to simplify compliance using Ethereum.

The project led by UBS with help from Barclays, Credit Suisse, KBC, SIX and Thomson Reuters, aims to make it easier for banks to reconcile a wide range of data about their counterparties. Traditionally, regulated companies use what are called “legal entity identifiers” that are stored in a global data system to execute transactions on behalf of clients, even if those clients themselves dont have one of the codes.

But as part of the Markets in Financial Instruments Directive (MiFID) II, scheduled to go live in the EU on January 3, 2018, all eligible legal entities will be required to have and use these codes.

To enable compliance with the directive, the banks built Madrec to mutualize much of the effort in a potentially industry-wide reconciliation process hosted in the Microsoft Azure cloud. Built over a six-month period, the platform evolved into a smart contract-powered network designed to integrate with identifiers endorsed by The Legal Entity Identifier Regulatory Oversight Committee (LEI ROC) and others. The reconciliation of the LEI reference data includes industry classification and information from the European Securities and Markets Authority (ESMA).

Therefore, instead of each company checking the information independently, and reconciling the results periodically, the blockchain smart contracts will ensure accuracy in almost real-time.

The Madrec pilot is currently in a mock-live environment using 22,000 non-sensitive reference attributes for cash equity issuers. The pilot is scheduled to be completed by the end of January 2018, with a further, staged roll-out dependent on the result.

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Keywords: UBS, Ethereum, bank, MiFID compliance, trial, Barclays, Credit Suisse, KBC, SIX, Thomson Reuters, reconciliation, LEI
Categories: Blockchain & Cryptocurrencies | Cryptocurrencies
Countries: World
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Blockchain & Cryptocurrencies