BNP Paribas Securities Services, a leading global custodian, and SmartAngels, the leading direct investment platform, have taken a major step forward in crowdfunding history by signing a strategic partnership for the use of Blockchain technology.
BNP Paribas Securities Services and SmartAngels will allow private companies to issue securities on the primary market and give investors access to the secondary market using Blockchain technology. The pilot scheme is due to be launched in the second half of 2016, subject to regulatory approvals.
A unique partnership with big ambitions: a major step forward for crowdfunding and the management of private share ownership
Under the partnership, BNP Paribas Securities Services is developing a share register that uses the Blockchain protocol, which will automatically register financial securities issued by SmartAngels’ client companies.
Investor payments will be processed immediately and e-certificates will be issued to them straight away. Financial transactions made via the platform will therefore be performed simply, quickly, securely and for a lower cost.
In a sector that is seeing sharp volume growth, SmartAngels’ clients will benefit on two levels. The solution will standardise the securities registration process, providing investors with additional IT and trade processing security. At the same time, the Blockchain platform operated by BNP Paribas will simplify the management of shareholders for issuers.
Philippe Ruault, Head of product for clearing, custody and settlement at BNP Paribas Securities Services, said: “By applying Blockchain technology in the crowdfunding sector, we will accelerate cash and securities flows by using e-certificates, and make them more secure. This is a major innovation for the custody and account-keeping of unlisted securities. It also provides BNP Paribas Securities Services with the opportunity to test a solution that could be applied to listed securities markets. The use of Blockchain is part of BNP Paribas’ digital strategy.”
Opening of the first secondary market for crowdfunding
The standardisation of transactions and the enhanced security provided by BNP Paribas Securities Services will also allow investors to trade their shares directly on the SmartAngels platform, creating a secondary market for companies registered with the platform. This will make crowdfunding investments much more liquid - an issue not given much attention in this sector until now.
The integration of Blockchain technology on the SmartAngels platform will accelerate the movement started by the crowdfunding pioneers several years ago, making it easier for start-ups and growth SMEs to access financing. It will reinforce SmartAngels’ lead in the equity crowdfunding market and confirms the advantages of its business model as a marketplace for direct investment. SmartAngels will further enhance the professionalism of the crowdfunding sector and will accelerate its transition to becoming an efficient capital market for private companies.
“At the moment, only a few thousand companies are listed on the financial markets in Europe. The integration of Blockchain on crowdfunding platforms will give hundreds of thousands of start-ups and growth SMEs fast access to low-cost financing from individual and professional investors,” explained Benoit Bazzocchi – founder of SmartAngels.
BNP Paribas Securities Services, a wholly-owned subsidiary of the BNP Paribas Group, is a leading global custodian and securities services provider backed by the strength of the BNP Paribas Group. It provides multi asset post trade and asset servicing solutions for institutional participants in the investment cycle, from the buy-side and sell-side to corporates and issuers. Covering over 100 markets, offices in 34 countries, the BNP Paribas network is one of the most extensive in the industry. We bring together local insight and a global network to enable clients to maximize their market and investment opportunities worldwide.
BNP Paribas has been researching Blockchain technology since 2011 and is part of the R3 and CDC industry consortiums. The Group has also invested in Digital Asset Holdings and has organised several bizhackathons on Blockchain to understand how the technology can be applied to its business activities.
SmartAngels.fr is the leading crowdfunding platform in France for direct investment in the capital of start-ups and growth SMEs by individual and professional investors. As a pioneer of direct investment in non-listed companies, SmartAngels counts 20,000 registered members having invested €20 million in 35 companies since 2012.
Benoît Bazzocchi, chairman and founder of SmartAngels, is also chairman of AFIP (the French crowdfunding association) and a member of the board of directors of the association France FinTech.
SmartAngels has been approved as a Crowdfunding Investor Adviser (CIP) by the French Financial Markets Authority (AMF) since February 2015.