Singapore FinTech STACS Partners with CSOP Asset Management

CSOP Asset Management Pte. Ltd. (CSOP) and leading Singapore FinTech firm, Hashstacs Pte Ltd (STACS) announced the completion of their Over-the-Counter (OTC) Derivatives Trade Processing prototype, built by STACS on its Distributed Ledger Technology (DLT)-based platform, Vetta.

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Set in the context of the Asset and Wealth Management industry, the teams collaborated closely over the course of two months to build a blockchain-powered platform that allows for automated concurrent processing and real-time, perpetual reconciliation of OTC derivatives trades. The adoption of DLT and smart contracts in this collaboration aims to enable new market opportunities and operating models, eliminating long-standing inefficiencies well-recognised in the industry and improving risk management.

This is part of the long-term collaboration between STACS and CSOP to deploy a live solution for efficient OTC trade processing across different asset classes. The platform aims to eliminate and streamline bespoke trade matching parameters and resolve trade exceptions in real-time.

The collaboration is supported by the Investment Management Association of Singapore (IMAS), the national representative body that spears the development of the fund industry in Singapore.

The platform was successfully delivered over sprints within two months, where trades were captured on the STACS blockchain immutably to provide trade participants with a single source of truth. Smart contracts were also deployed to automate and streamline the matching of trade parameters between CSOP and its counterparties.

Further enhancements of the platform in the pipeline include handling more sophisticated trade exception workflows and enabling the seamless resolution of trade breaks. Given that the OTC trades are highly bespoke and unstandardised, the collaboration would also see the incorporation of machine learning algorithms and optical character recognition technology to facilitate automatic data ingestion and transformation of unstandardised and unstructured trade parameters. Visibility of incoming trades will also be provided to both parties, with each transaction record being stored in an audit log, thus increasing transparency and auditability of data.

STACS and CSOP aim to push the industry frontier on OTC trade processing, by incorporating a wider ecosystem of market participants on this industry-wide platform interoperable with existing systems, to alleviate the financial industry from the extensive operational burden in times of trade volatility and to allow the industry to collectively benefit from the adoption of new technology to solve key challenges in trades processing and reap new strategic business opportunities.