Fundnode: From Efficiency to New Business Models in Funds

Background and Introduction

Singapore remains a leading international financial centre in Asia, with S$4.9 trillion of discretionary and advisory assets under management (AUM) in 2022. To strengthen and maintain Singapore's position as a full-service international fund domiciliation and asset management hub, several national initiatives are underway to develop supporting financial market infrastructure and developing market-leading capabilities.

The Monetary Authority of Singapore's (MAS) refreshed Financial Services Industry Transformation Map (ITM) 2025 outlined five key strategies for Singapore. These include: i) enhancing asset class strengths, ii) fostering a skilled and adaptable workforce, iii) catalysing Asia's net-zero transition, iv) shaping the future of financial networks, and v) digitalising financial infrastructure.

Within funds, the need to improve funds settlement infrastructure and processing was validated as a key need by the Singapore Funds Industry Group (SFIG), an industry group co-chaired by MAS and an industry representative, bringing together stakeholders across the entire asset management value chain.

In August 2022, Marketnode was announced as the operator for Singapore's fund settlement infrastructure on blockchain, Fundnode, which has subsequently gone live in Q2 2024.

On the back of industry demand, Fundnode standardises and streamlines fund messaging and processing. Furthermore, tracking the lifecycle on a common ledger provides a single source of truth for transactions and record-keeping. Through Fundnode, participants experience shorter settlement times, reduced errors, and streamlined workflows.

Through this white paper, we hope to share our experiences and address three key questions:

• What are some considerations when building a national level market infrastructure?
• Besides efficiency, what other pain-points could a new infrastructure alleviate?
• How can this new infrastructure enable new business models?