SIX and Banque Pictet & Cie SA have announced the successful conclusion of a joint pilot project, tokenising corporate debt instruments and allocating fractional quantities of these assets to portfolios managed by Pictet Asset Management SA. This initiative demonstrates the potential of tokenized securities which will offer more flexible, efficient, and scalable tools for delivering tailored investment solutions to Asset Managers. This work paves the way for broader adoption of digital infrastructure and acts as an important starting point for the mutual funds industry.

While mutual funds have long served investors, the emergence of digital securities introduces a fundamental upgrade, allowing investors to have greater control of investment choices with improved operational efficiency.

The pilot project focused on EUR- and CHF-denominated corporate bonds, held in custody at SIX SIS to be tokenized on the SDX platform. These were then allocated in fractions to the investors via the portfolios‘ custody bank account, enabling a level of portfolio customisation which would not be easily achievable via traditional systems. A key benefit is that the solution can be utilised for all debt instruments (both traditional and digitally issued).

This pilot supports new operating models for mutual fund management, including more tailored investment strategies and improved diversification for smaller investments, supported by automated fractionalised portfolio rebalancing. Tokenisation broadens access to asset classes such as corporate bonds by facilitating smaller investment sizes that attract a more diverse range of investors.

David Newns, Head SDX, said:  “We are delighted that our successful pilot project with Pictet has established a foundation for integrating digital bonds into fund portfolios. This milestone marks the first successful fractionalization of securities on regulated blockchain-based financial market infrastructure in production. Tokenized securities combined with fractionalization on SDX enables more flexible, efficient, and inclusive financial services, allowing asset managers and financial institutions to unlock real value from digital assets.”

Olivier Ginguené, Chief Investment Officer Multi Asset & Quantitative Investment at Pictet Asset Management, said: “We are pleased to collaborate with SIX on this breakthrough project. It is the first time that tokenisation and fractionalization have been combined in the Swiss market to enable real investments in traditional asset classes such as equities or bonds. A new and innovative use case for tokenized trading of securities that opens up for customisation at scale. We look forward to continuing to be part of their journey.”

The collaboration between SDX and Pictet confirms that tokenized assets combined with fractionalization can deliver real benefits across the fund management value chain, from operational efficiencies to enhanced outcomes and experience for investors.

Source: SIX