Northern Trust has expanded its
private equity administration blockchain to incorporate legal clauses in smart contracts. Hence the blockchain enables participants to negotiate, review and digitally sign contracts. The company custodies or manages more than $10 trillion in assets.
“The ability to leverage digital documents that include smart contract code across multiple platforms is a very significant step toward the future digital environment of securities servicing,” said Pete Cherecwich, president of Corporate & Institutional Services at Northern Trust.
The participants took advantage of recent legal changes in Guernsey which acknowledge the legal effect of smart contracts. The client was Emerald Technology Ventures with funds administered in Northern Trust’s blockchain in Guernsey. And the contracts were Limited Partnership Agreement side letters which contained legally binding clauses. There’s usually a standard Limited Partnership Agreement, and side letters would typically include terms specific to just one particular investor.
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