Capital markets News

Italy’s Mediobanca tokenizes mutual fund units

Yesterday the Mediobanca Group announced it issued tokenized investment fund units. The issuance is operating within a Ministry for the Economy and Finance sandbox.

The tokens mirror the conventional process for issuing and redeeming units in its “Mediobanca Global Multimanager 35” UCITS fund. While transactions are logged using blockchain, the conventional transaction records are what’s valid from a legal perspective.

Nonetheless these are important steps in the path to tokenization. The tokens were issued to a select group of clients in May, and earlier this month it was extended to certain clients of CheBanca!, the bank’s wealth management brand. A wallet was provided to store the tokens.

“Security tokens are an emerging trend in the financial sector, as shown by their continuing growth at international level”, said Emilio Franco, CEO of Mediobanca SGR. “Mediobanca is the first to propose this method of subscribing for instruments in Italy, which will open up new scenarios in asset management for the future, with clear advantages in terms of efficiency and transparency for the whole subscription process, and in terms of the accessibility of investments.”

For the project Mediobanca partnered with Cetif Advisory, the consultancy offshoot of the Italian university. It used the Cetif Advisory’s Lionity platform for the issuance. We’ve asked about the blockchain technology involved, but didn’t get a response in time for publication. Projects that target investors directly often use public blockchains but Mediobanca referred to DLT rather than blockchain.

Additionally, Reply was involved as technology partner and Linklaters on the legal side.

Meanwhile, Italian asset manager Azimut has been embracing blockchain for some time. More than two years ago it tokenized a loan portfolio.

During the past year the asset management sector has accelerated its blockchain activities. Last month the UK’s abrdn tokenized a money market fund on the public Hedera DLT. And Schroders is working on fund tokenization with fund distributions platform Calastone.