Northern Trust claims blockchain breakthrough
April 15, 2019

Northern Trust says it has pioneered the capability to deploy legal clauses as smart contracts directly from a digital legal agreement onto its private equity blockchain. It says the industry-first technology application on a blockchain can be deployed to other platforms, with potential for broad use in generating digital documents and applying conditions beyond legal agreements.

Northern Trust says its application has leveraged advanced software developed by legal-technology startup Avvoka which enables participants to negotiate, review and digitally sign legal agreements. This new capability was deployed for Emerald Technology Ventures, a venture capital firm with funds administered on Northern Trust's blockchain in Guernsey.

Northern Trust says it worked with law firms Carey Olsen, representing Emerald, and Allen & Overy, representing investors in the Emerald Industrial Innovation Fund, to digitally generate and agree to Limited Partnership Agreement side letters containing legally binding clauses.

"As financial markets move towards digital processes, Northern Trust will continue to drive the technology innovation that will redefine our industry," said Pete Cherecwich, president of Corporate & Institutional Services at Northern Trust.

"The collaboration and innovation that led to this further breakthrough in blockchain technology is a testament to all parties involved. The ability to leverage digital documents that include smart contract code across multiple platforms is a very significant step toward the future digital environment of securities servicing." 

Northern Trust launched the first commercial blockchain solution for private equity fund administration in 2017 and was awarded four US patents in 2018 for processes critical to the move from manual to digital operations in private equity. Northern Trust also collaborated with major audit firms to enable real-time auditing of private equity lifecycle events on the blockchain.

It says that key to the latest enhancement is the ability to embed code in a legal agreement which is applied to the blockchain and persists through the lifecycle of the investment. The development neatly coincides with the recent approval in Guernsey of an amendment to existing law validating the legal effect of such smart contracts.

 





This site, like many others, uses small files called cookies to customize your experience. Cookies appear to be blocked on this browser. Please consider allowing cookies so that you can enjoy more content across fundservices.net.

How do I enable cookies in my browser?

Internet Explorer
1. Click the Tools button (or press ALT and T on the keyboard), and then click Internet Options.
2. Click the Privacy tab
3. Move the slider away from 'Block all cookies' to a setting you're comfortable with.

Firefox
1. At the top of the Firefox window, click on the Tools menu and select Options...
2. Select the Privacy panel.
3. Set Firefox will: to Use custom settings for history.
4. Make sure Accept cookies from sites is selected.

Safari Browser
1. Click Safari icon in Menu Bar
2. Click Preferences (gear icon)
3. Click Security icon
4. Accept cookies: select Radio button "only from sites I visit"

Chrome
1. Click the menu icon to the right of the address bar (looks like 3 lines)
2. Click Settings
3. Click the "Show advanced settings" tab at the bottom
4. Click the "Content settings..." button in the Privacy section
5. At the top under Cookies make sure it is set to "Allow local data to be set (recommended)"

Opera
1. Click the red O button in the upper left hand corner
2. Select Settings -> Preferences
3. Select the Advanced Tab
4. Select Cookies in the list on the left side
5. Set it to "Accept cookies" or "Accept cookies only from the sites I visit"
6. Click OK

Northern Trust says it has pioneered the capability to deploy legal clauses as smart contracts directly from a digital legal agreement onto its private equity blockchain. It says the industry-first technology application on a blockchain can be deployed to other platforms, with potential for broad use in generating digital documents and applying conditions beyond legal agreements.

Northern Trust says its application has leveraged advanced software developed by legal-technology startup Avvoka which enables participants to negotiate, review and digitally sign legal agreements. This new capability was deployed for Emerald Technology Ventures, a venture capital firm with funds administered on Northern Trust's blockchain in Guernsey.

Northern Trust says it worked with law firms Carey Olsen, representing Emerald, and Allen & Overy, representing investors in the Emerald Industrial Innovation Fund, to digitally generate and agree to Limited Partnership Agreement side letters containing legally binding clauses.

"As financial markets move towards digital processes, Northern Trust will continue to drive the technology innovation that will redefine our industry," said Pete Cherecwich, president of Corporate & Institutional Services at Northern Trust.

"The collaboration and innovation that led to this further breakthrough in blockchain technology is a testament to all parties involved. The ability to leverage digital documents that include smart contract code across multiple platforms is a very significant step toward the future digital environment of securities servicing." 

Northern Trust launched the first commercial blockchain solution for private equity fund administration in 2017 and was awarded four US patents in 2018 for processes critical to the move from manual to digital operations in private equity. Northern Trust also collaborated with major audit firms to enable real-time auditing of private equity lifecycle events on the blockchain.

It says that key to the latest enhancement is the ability to embed code in a legal agreement which is applied to the blockchain and persists through the lifecycle of the investment. The development neatly coincides with the recent approval in Guernsey of an amendment to existing law validating the legal effect of such smart contracts.

 



Free subscription - selected news and optional newsletter
Premium subscription
  • All latest news
  • Latest special reports
  • Your choice of newsletter timing and topics
Full-access magazine subscription
  • 7-year archive of news
  • All past special reports
  • Newsletter with your choice of timing and topics
  • Access to more content across the site