How DLT Securities are Removing Intermediaries

Record Keeping

  • The distributed ledger will server as a record system for parties to verify ownership of shares without the need for an intermediary or stock certificate.
  • Issuers will allow investors to store their securities directly, without sacrificing any of the administrative and tracking capabilities formerly required.
  • Data room files stored on the distributed ledger will be less exposed to a hacking or manipulation risk, while maintaining a more accurate audit trail of changes to prevent internal unauthorized activity.
  • Files will be more seamlessly integrated with existing legacy systems and workflows without requiring the need to use third-party software.
  • Systems will be less of central point of authority and securities management and more of a visual interface and method to interact with the distributed ledger.
  • Companies will be less reliant on the software used to automate systems on single Cap Table software and more so on the decentralized DLT Security protocols.
How it Works

Service Providers

  • Reduction of fund administration fees past down to investors as higher post management fee returns.
  • Creation of new asset classes and investment strategies such as private market index funds, secondary transactions, and securities bundles.
  • Shifted role to oversight and consultation, or less time spent carefully phrasing legal documents and structuring arbitration or contract violation provisions.
  • Spend more time focusing on areas that require manual review, which may shift after some areas become automated, making them the focus of legal attack or risk.
Image: Transaction Flow for Automated Contract Enforcement
  • Focus on building trustworthy relationships with buy-side clients that trust you represent their best interest and have the best transactions.
  • Consider restructuring your fees and reducing your administrative overhead to focus more on end-results rather than compliance, transaction structuring, and deal advisory for sell-side engagements to remain competitive.

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Liquidity Enabled Cap Table Automation

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