Guernsey Says Note Issue A 'Fintech First'
by Jason Gorringe, Lowtax.net, London
07 August, 2017
Guernsey-domiciled Dom Re IC Limited has issued what it believes are the first notes ever to have been digitised on a private blockchain.
Dom Re IC Limited issued USD14.8m Principal-at-Risk, Participating Notes (an asset-backed securitization of a reinsurance contract), due 2023, to a total of six investors.
On the issue date, the paying agent created cryptographically-certificated notes on the "ILSBlockchain" and then the investors were able to execute, peer-to-peer with the paying agent, delivery-vs-payment transactions on the ILSBlockchain to purchase the newly created notes. Referred to as the "ILSBlockchain", the private blockchain mechanism replaced the role of traditional settlement systems such as Euroclear or the Depository Trust Company for this note issue.
Cedric Edmonds, Director of Solidum Re, whose idea it was to use a blockchain and who was key in the design and implementation of the ILSBlockchain and surrounding structural mechanics, explained that Dom Re required an alternative to Euroclear. He said it was becoming increasingly difficult to access Euroclear efficiently for smaller private placement note issues. "It was a case of necessity being the mother of invention," said Edmonds.
Mark Helyar, Non-Executive Director of Solidum Re and Of Counsel, Bedell Cristin, said: "I am delighted that Solidum Re ICC has concluded this latest transaction. It is not an exaggeration to describe the new Dom Re IC structure as a ground breaking, global first, not only for the insurance-linked securities (ILS) sector but for dematerialization of listed securities generally. Guernsey is once again the jurisdiction of choice for innovation in the ILS sector and I anticipate this model will be widely adopted."
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