Borsa Italiana, a subsidiary of London Stock Exchange Group has entered into a collaboration with IBM for the development of securities data blockchain solution for European small and medium enterprises (SMEs).

The blockchain solution to be developed by IBM will simplify the tracking and management of shareholding information. 

The new system is aimed at creating a distributed shared registry that contains records of all the shareholder transactions. This new implementation is expected to open up new avenues for trading and investment.

For unlisted SMEs in Europe, the new blockchain solution will be designed to replace paper trading certificates that are commonly issued to private companies.

The project will result in providing a highly digitised, streamlined and transparent process build by using blockchain technology to allow several parties, including from issuers, regulators and investors, to gain insight into company information.

As privately owned SMEs do not have access to public stock exchange networks or are formalised credit structures, the new blockchain solutions is claimed to help SMEs in gaining improved access to credit and link into a broader and more mature investor ecosystem. 

Borsa Italiana CEO Raffaele Jerusalmi said “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,”.

London Stock Exchange Group Group COO and CIO Chris Corrado said "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,".

IBM Blockchain general manager Marie Wieck said: “Sharing secure and transparent critical network data across shareholder networks is difficult using traditional system. “Blockchain is poised to help remove some of these barriers in traditional methods for the transfer of value – much as the Internet did for the exchange of information in the late 1990s.”

Image: London Stock Exchange. Photo courtesy of Kaihsu Tai/Wikipedia.