The OpenFinance Network (OFN) and Why It Matters
Our long experience in institutional trading has shown us there’s a manifestly better way to structure the execution and settlement of trades in the alternative assets sector. We’ve teamed up with blockchain technologists to develop the OpenFinance Network (OFN), an open-source solution for the cumbersome clearing and settlements process.
What is the OFN?
At its simplest, OFN is a collaborative platform for the certifying and validating of participants and their assets in financial transactions. By collaborative, we mean the OFN is a system designed to be used by all of the primary actors in a securities transaction, including broker-dealers, issuers, transfer agents, clearinghouses, custodians, fund administrators, capital raising portals, and of course, retail investors.
Participants can interact directly with the OFN framework, or they can continue to work with their intermediaries who are then integrated within OFN.
Regardless of how participants choose to operate, the essential gamechanger of the platform is that the details of each and every transaction is stored on the OFN. Currently, no single institution or entity has a master record of all executed transactions. So at its very basic construct, OFN is dramatically altering and improving the historical record-keeping of the alternative assets industry.
Leveraging our decentralized securities depository system, the industry can perform the full scope of the securities transaction lifecycle entirely on blockchain. For example, rather than relying on manually reconciled ledgers, participants on the marketplace can conduct real-time verifications of asset ownership and fund availability in order to eliminate counterparty risk between parties, and more efficiently process the settlement of trades.
Increased Security, Transparency and Efficiency
The primary benefit of the OpenFinance Network to the industry is the capability to leverage the strengths of blockchain technology (e.g. security, transparency and efficiency) in a compliant fashion that is in-line with the regulatory framework of financial markets.
The standardization and interoperability that is provided by the OFN system creates a broader capital market that network participants can easily access and integrate with in their current capacity. The resulting unification of a fragmented marketplace creates new opportunities for incumbents and new entrants alike.
The more participants that are involved, the better and more liquidity each participant can achieve. In the end, investors gain access to a wider universe of alternative assets, have full transparency to the entirety of their portfolio and the investment process, and benefit from the efficiencies, cost reduction and flexibility in the securities transaction management process. The brokers and financial advisors who service this community can also provide better access, reporting and insights to their clients across the spectrum of their portfolio.
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Juan M. Hernandez is the Founder and CEO of OpenFinance Network, the trading platform for security tokens and other alternative assets. Juan is a serial entrepreneur, technologist, and polymath experienced in financial markets, exchanges, and blockchain technology. He holds a CS degree from Northwestern University and an MBA from the Kellogg Graduate School of Management.
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