Schroders receives regulatory approval for its first tokenised share class

Schroders has received regulatory approval for its first tokenised share class of a US dollar money market fund.

The firm said the approval marked a significant milestone in its focus on developing digital investment solutions for clients.

Regulatory approval was granted by the Central Bank of Ireland to launch the fund with a tokenised share class, Schroders Onchain Active Returns (SOAR).

Schroders said the fund launch aimed to meet growing client demand for digital asset solutions and enhanced operational efficiency.

Using J.P. Morgan’s multi-chain asset tokenisation platform, Kinexys, clients will be able to use smart contracts to execute redemptions and transfers.

This will enhance the mobility of the money market fund, enabling transfers among Schroders’ clients and unlocking potential future use cases, such as collateralisation and broader 24/7 treasury and liquidity management, Schroders stated.

The Ireland-domiciled fund will utilise the experience of Schroders head of US fixed income and portfolio manager, Neil Sutherland, alongside a range of credit specialists.

“By combining money market investments with the benefits of distributed ledger technology, we are offering investors a new level of access, efficiency and security,” commented Schroders chief financial officer, Meagen Burnett.

“This milestone is a testament to our commitment to developing world-class solutions that meet the evolving needs of investors in the digital age, and is a pivotal step forward for Schroders, as we move towards our vision of delivering a composable finance ecosystem for our clients.”

Kinexys by J.P. Morgan global head of market development, Kara Kennedy, added: “Tokenised financial infrastructure is no longer theoretical; it’s restructuring liquidity, settlement and digital asset workflows at increasing speed.

“As demand for tokenised assets grows, tokenised money market funds can help meet investor needs while introducing new features enabled by blockchain technology.

“We remain committed to helping the industry at large evolve solutions that lower barriers to entry and add value through new on-chain functionality.”

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