Top mutual fund firm The Vanguard Group, Inc. unveiled a plan last week to incorporate blockchain smart contract technology into some of its indexing operations beginning early next year. Vanguard’s initiative will be carried out through a partnership with the Center for Research in Security Prices (CRSP) and technology provider Symbiont and is intended to simplify Vanguard’s index data sharing process. By utilizing a dedicated blockchain network created by Symbiont, Vanguard hopes to make CRSP data available to investment managers on a nearly instantaneous basis.

Vanguard’s plan comes at a time when many large financial institutions are hesitant to fully commit to incorporating blockchain’ s untested technology into financial systems that are already subject to daily cyber threats. However, Vanguard believes that its use of blockchain will allow it to distribute sensitive and time-critical index information in a secure manner not possible under its current system, which relies on providers such as CRSP to send manual updates of fund data to investment managers throughout the day. By automating workflows and the delivery of such data via a blockchain, Vanguard hopes to expedite data delivery while also reducing risks that stem from manual updates.

Vanguard’s announcement coincided with a report that Barclays, Credit Suisse, KBC, SIX, and Thomson Reuters will also attempt to utilize blockchain technology to simplify the sharing of data. The pilot program launched by these companies is designed to streamline the distribution of compliance information by taking advantage of the already existing Ethereum blockchain network.

Vanguard’s press release discussing its collaboration with CRSP and Symbiont is available here.

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Photo of Scott Baird Scott Baird

Scott M. Baird is an associate in the firm’s Business Transactions and Finance Groups, where his practice involves all aspects of corporate and securities law, including corporate governance, mergers and acquisitions, private equity and venture capital transactions, joint ventures, finance transactions, and securities…

Scott M. Baird is an associate in the firm’s Business Transactions and Finance Groups, where his practice involves all aspects of corporate and securities law, including corporate governance, mergers and acquisitions, private equity and venture capital transactions, joint ventures, finance transactions, and securities law and compliance. He focuses on new legislation as well as regulatory and compliance matters involving financial service institutions. Read his full rc.com bio.

Photo of Norman Roos Norman Roos

Norman Roos, a member of Robinson+Cole’s Business Transactions Group, concentrates his practice on transactional, regulatory, and technology matters relating to the financial services and real estate industries. He is also a member of the firm’s Financial Services Cyber-Compliance Team and advises financial institutions…

Norman Roos, a member of Robinson+Cole’s Business Transactions Group, concentrates his practice on transactional, regulatory, and technology matters relating to the financial services and real estate industries. He is also a member of the firm’s Financial Services Cyber-Compliance Team and advises financial institutions concerning data privacy and security matters, particularly in relation to policy planning and implementation.

Mr. Roos is counsel to the Connecticut Mortgage Bankers Association, Inc., and is president-elect of the American College of Mortgage Attorneys where he has served on the Board of Regents and as Connecticut State Chair. A member of the Connecticut Bar Association, Mr. Roos is Past Chair of the Financial Institutions Law Section. He has served on a number of Connecticut Law Revision Study Committees including those on Uniform Common Interest Ownership Act, Electronic Communications, Mortgagor Liability, and Electronic Recording of Land Records. Read his full bio here.