Tech company DigitalX (ASX:DCC) wants to put director trades on the blockchain, and investors approve.
Shares in the company came out of a trading halt to climb to 12c at the opening bell, a gain of ~25pc.
That marks a gain of 6x since the start of the 2021 financial year, after the stock opened on July 1 at 2c.
Open the drawbridge
DCC’s announcement this morning was in connection with Drawbridge, a digital compliance tool.
The product was developed using Digital Asset Modelling Language (DAML) built by Digital Asset Holdings, in which the ASX holds a stake.
It’s the same technology being used by the ASX for the rollout of their new clearing and settlement system, which is now slated for an April 2023 release.
The core function of Drawbridge is to establish clear compliance rules around the “orderly acquisition and disposal of securities” by people within a company.
DCC said that over 10,000 director interest notices are lodged annually with the ASX.
And due to the manual nature of the form completion process, they are often prone to mistakes and human error.
By using distributed ledger technology, DigitalX said it has built an automated platform that will help reduce manual errors and risks around procedural compliance (such as the correct periods in which investors can buy and sell shares).
As part of its client acquisition strategy for the new service, DCC said it has launched an early adopter program to attract clients.
Early signups will receive a discounted rate for the first six months and provide customer feedback.
DCC’s initial target market is the “circa 2,200 companies listed on the ASX”.
It also flagged the possibility of extending the service to other exchanges through the network of Digital Asset Holdings, which is backed by some marquee strategic investors including Goldman Sachs and JP Morgan.
More broadly, DCC’s management team is looking to build products that tap into a prevailing trend in which “blockchain technologies will be foundational to the transformation of financial markets infrastructure globally”, the company said.
