Focused on Digitalization Solutions for Equity Issuers
Digitalization is permeating how companies are doing business. Companies are using easy to use digital services for accounting, banking and managing ownership. KDD is a long-standing asset servicing and securities depository services provider to stock companies in the SEE region. By partnering with a fintech company, KDD is committed to solidifying its leadership with best-in-class services and infrastructure to its current and future client base.
Together with Securities Grid, KDD will be launching a digital ownership management platform in 2020 that will empower CFO’s, accountants and board secretaries with powerful solutions enabling them to:
- Securely access their share register and monitor changes to the registry via secondary market transactions
- Data exchange with KDD when issuing and distributing new securities
- Communicate with their shareholders electronically to help facilitate and organize annual general meetings and distribute information via a private and equitable communication channel
- Execute corporate actions with special focus on dividend payment execution
- Streamline transactions and operations for shares with builtin pre-emption rights and transfer restrictions that require board approval, cutting complexity and costs for corporate and SME equity issuers
- Manage internal buy and sell information exchange, enabling buyers and sellers of securities to connect and trade shares via KDD system members.
Additionally, the platform has benefits for shareholders of non-listed equities, since it facilitates the distribution of information relating to potential sale or buy interests by investors or other shareholders.
Piloted by equity issuers BTC Company and Loterija Slovenije (Slovenian National Lottery)
KDD ran a pilot programme during the course of the summer to pre-launch the digital ownership management platform with selected equity issuers with the goal to validate and fine-tune the solutions that are built-in and to test it with real users and real securities data.
In the scope of the pilot, KDD onboarded two larger enterprises with widely dispersed shareholdership to participate in the pilot program to test the digital ownership management solution presented to them.
The first enterprise is BTC Company, one of the leading commercial property development companies in Slovenia, which manages BTC City, one of the largest business, shopping and leisure centers in Europe. The BTC Company also runs a logistics service business unit, which holds the leading market position in FMCG logistics in Slovenia.
Rajko Cvorovic, CFO & CIO at BTC company commented: “In line with our digital transformation strategy, one of our internal goals is also to adopt an easy to use digital services that will help us better manage our ownership management processes. The solution provided to us by KDD via Securities Grid partnership will enable us to continuously monitor how our shareholder register changes due to secondary market transactions and inspect the origins of such transactions.”
The second onboarded enterprise is Loterija Slovenije d.d. (Slovenian National Lottery). which is one of the two ongoing operators having the concessions for organizing classic games of chance and the only provider of lottery games in Slovenia. Its 1,100 outlets offer over 40 different games, which are organized according to the highest lottery and information security standards.
Future-proof Distributed Ledger Technology at its Core
The digital ownership management platform is powered by enterprise-grade permissioned distributed ledger technology (DLT). DLT in the context of capital markets was recently the main focus in the paper by the International Securities Service Association (ISSA): “Crypto Assets - Moving from theory to practice,'' that was co-authored by KDD as a member of the securitization industry working group. The paper lays out a case for DLT networks and digital assets and the potential to transform the technology that is powering capital markets. Especially technology in the post-trade processes of the industry.
KDD and Securities Grid plan to roll out the end product to customers in phases, where the first phase shall be dedicated to security testing and production preparation. Followed up by deploying a production-grade DLT network to system members of KDD and the integration of the end solution with e-brokerage for better shareholder user experience.
KDD’s strategy to this disruptive and innovative technology is to utilize the benefits of DLT network technology for complex data exchange amongst its core registry services and its systemic members as a first use case. In the future, KDD will continue to utilize the strong DLT infrastructure foundation developed by Securities Grid to explore native digital asset issuance as the EU regulatory environment matures and progresses.