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NewsThe problem
“COVID-19 has accelerated the digital transformation exponentially. As a result, the need to protect digital documents such as prospectuses, diplomas, medical prescriptions or credit certificates, against forgery or unauthorized manipulation has increased dramatically.”
– Manuel Gall, Co-Founder Certifaction
On 1 January 2020, two new laws came into force in Switzerland within the framework of the new financial market architecture, the Financial Services Act (FinSA) and Financial Institutions Act (FinIA). Among other things, the FinSA is intended to ensure that information in prospectuses that must be published in the context of public offerings of financial instruments are complete, coherent and comprehensible in terms of content. Before such a prospectus is published in Switzerland, it must be reviewed by a prospectus review office like BX Swiss AG.
With this in mind, how can an investor be sure that the prospectus for public offerings of financial instruments in his hands is the one that was initially reviewed and approved? How can the same investor be sure that the provided information has not been tampered with?
The solution
BX Swiss and Certifaction have partnered to address the potential risk of fraud inherent to forged prospectus documents.
Matthias Müller, BX Swiss General Secretary says:
“With Certifaction we have an ideal solution to efficiently certify prospectuses for financial instruments. This makes them absolutely tamper-proof and instantly verifiable on the blockchain by investors. We are proud to be a frontrunner in the application of blockchain technology and increase trust and efficiency in the financial ecosystem.”
The process works as follows:
First, the issuer or provider of financial instruments requests approval of the prospectus from BX Swiss, which does a thorough check of the documents to see whether they conform with the FINMA regulations. If this is the case, BX Swiss puts its confirmation seal on the prospectus.
The PDF’s unique fingerprint (hash value) is calculated through Certifaction’s software and then secured on the Ethereum blockchain with the approved financial authority’s signature.
When the financial service provider makes their prospectus available to the public, for example on their website, any investor can download it and then verify its authenticity via Certifaction’s verification tool. Click here, to try it out yourself.
One of Certifaction’s key features is its ability to process all sensitive information locally in the client’s environment. No sensitive data is uploaded to the cloud or to any outside servers. Only the hash (a.k.a. the “fingerprint” of a document), is stored on the blockchain. It is impossible to reconstruct the original document from the hash. This makes Certifaction, in many ways, superior to other existing solutions in terms of data privacy and GDPR compliance.
Blockchain technology ensures an immutable paper trail exists of the certification process. While blockchain is still in its relative infancy in terms of real world use and adoption, Certifaction is able to harness the technology and make it available for anyone to use by reducing traditional hurdles such as wallet management, gas fees, etc. No prior blockchain knowledge is needed.
Benefits
The collaboration between BX Swiss and Certifaction provides a number of benefits to the financial ecosystem, creating trust in a digital world and increasing efficiency.
The investor
The investor can be fully confident that a prospectus is compliant with regulations and has been certified by the prospectus review office. The verification can easily be done on the website of the prospectus review office at www.regservices.ch and facilitates swift and proper due diligence.
The issuer or provider of financial instruments
The issuer or provider of financial instruments increases their trustworthiness with investors by providing a certified prospectus that is tamper-proof and instantly verifiable. This is supported by the financial authority that reviewed the prospectus and secured it on the blockchain.
The prospectus review office of BX Swiss
The prospectus review office of BX Swiss is able to provide a digital stamp that can be applied instantly and protects the integrity of its approval. This also eliminates administration costs by removing the verification burden from BX Swiss, as verification requests can be carried out by the investor directly on the Ethereum blockchain.
