Northern Trust builds on blockchain-backed private equity solution

Bailey McCann, Opalesque New York:

Private equity clients at Northern Trust can now carry out audits of private equity lifecycle events directly from the blockchain. Northern Trust, working with PwC and other audit firms in Guernsey, has added this feature to its existing solution set for private equity using blockchain.

The latest update allows an audit firm to have its own blockchain node, providing access to relevant fund data to enable real-time audit capabilities.

As Opalesque previously reported, Northern Trust launched the first commercial deployment of blockchain technology for private equity fund administration last year. Northern Trust’s solution was developed through work with its client $20 billion Swiss asset manager Unigestion and enables private equity firms to manage fund documentation through verified ledger transactions. Northern Trust partnered with IBM for the offering, which works off of the Hyperledger Fabric. Hyperledger is an open-source blockchain development platform that is focused on finding ways to use distributed technology in financial services.

The latest development gives the audit firms access to a “golden copy,” or immutable master record, of the fund’s data from their own offices. Audit firms can then either transfer the required data into internal applications to complete the audit process or develop n………………….

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Northern Trust strengthens auditing via blockchain technology

ChicagoNorthern Trust launched the first commercial deployment of blockchain technology for private equity in February 2019. In March 2018 it extends this with an announcement that audit firms can now perform audits of private equity lifecycle events directly from the blockchain.

This enhancement enables an audit firm to have its own blockchain node. This node provides access to relevant fund data to enable real-time audit capabilities. Northern Trust, working with PwC (one of the big four) and other audit firms in Guernsey, has proved that auditors can now access fund data held on the private equity blockchain to audit specific events.

Pete Cherecwich, president of Corporate & Institutional Services at Northern Trust said: “By expanding our private equity blockchain ecosystem to the audit community, Northern Trust has enabled audit transactions to be recorded on a blockchain in real time. This will result in direct efficiencies to both the audit firms and Northern Trust, and provide investors with a more timely and valued assurance product.”

The significance of blockchain

This development provides an audit firm with access to the immutable master record of a fund’s data from its own offices. The audit firm can:

  • either transfer the required data into its own internal audit applications, to complete the audit process
  • develop tools to complete its audit directly on or from the blockchain itself.

For example, continuing development of the audit capabilities and the automation of the audit process by PwC will permit audits to complete in real-time as lifecycle events occur. This has a knock-on effect:

  • audits will be more streamlined and efficient
  • transparency of the underlying transactions to the audit process will increase
  • the possibility of real time auditing comes closer.
Nick Vermeulen
Nick Vermeulen

We are excited to be able to leverage the distributed ledger within Northern Trust’s private equity system to innovate our approach to auditing private equity funds.” said Nick Vermeulen, partner at PwC Channel Islands. “Our ability to directly access distributed ledgers such as the one within the Northern Trust system will allow us to build upon our own blockchain investments. Such innovation assists clients as they invest in the opportunities arising from emerging technologies. This ongoing process will help ensure we are in the best possible shape to adapt in the coming years of change.

Northern Trust and choosing the Hyperledger Fabric solution

Northern Trust provides wealth management, asset servicing, asset management and banking to corporations, institutions, affluent families and individuals. Founded in Chicago in 1889, the company has offices in the United States in 19 states plus Washington, D.C. along with locations in Canada, Europe, the Middle East and Asia-Pacific. At the end of 2017, Northern Trust had assets under custody/administration of US$10.7 trillion, and assets under management of US$1.2 trillion.

Its private equity audit solution developed by Northern Trust exploits the open source Linux Foundation Hyperledger Fabric. Northern Trust is also using the IBM Blockchain Platform within the IBM Cloud to develop and run the network. Hardware assisted cryptography and key management enhance the safety and scalability of transactions.

Northern Trust plans to explore expanding the new solution into other asset classes and jurisdictions. Whether it will do so will depend in part of the practical success with its initial platform.

What does this mean

This Northern Trust example is an instance of blockchain technology going into practical use, and he data on the blockchain being available to authorised third parties (audit firms). This is a significant step beyond the many pilots schemes ( Marco Polo, Union Bank, Banco Santander, etc.) which most are still evaluating.

The introduction of near-real time access by audit firms introduces an uncertainty factor. This is a ‘good’ uncertainty factor, not a failing. If audit firms can, using remote tools, access blockchains when they choose, the likelihood of audit failure diminishes – and all but the crooked should benefit.


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SWIFT’s Blockchain Pilot For Bank-To-Bank Transfers Went ‘Extremely Well’

A report by the financial messaging provider SWIFT and 34 global transaction banks that sought to answer the question of how distributed ledger technology (DLT) (Blockchain) Proof of Concept (PoC) can help Nostro account reconciliation has been published today, March 8, with positive results.

A Nostro account is a bank’s account in a foreign currency in another bank. Back in April 2017, SWIFT had first announced that it was going to use the Hyperledger platform as a basis for updating its practices of cross-border market payments in collaboration with Australia and New Zealand Banking Group, BNP Paribas, BNY Mellon and others.

SWIFT’s test project added an additional 22 more banks in July 2017, including Commerzbank, Societe Generale and JPMorgan Chase Bank.

SWIFT’s press release about the now published report on the bank-to-bank project notes that the PoC intended to figure out how a combination of DLT and SWIFT assets could meet “industry-level governance, security and data privacy requirements,” as well as show benefits for its use over other applications.

The 34 participating banks each had their own node deployed in a SWIFT DLT sandbox, whose underlying technology was the Hyperledger Fabric v1.0.

PoC results showed that DLT could provide the functions needed for Nostro account reconciliation, including “real-time event handling, transaction status updates, full audit trails, visibility of expected and available balances, real-time simplified account entries confirmation, the identification of pending entries and potential related issues, and […] the data required to support regulatory reporting.”

Damien Vanderveken, SWIFT’s Head of Research and Development, said in the press release:

“The PoC went extremely well, proving the fantastic progress that has been made with DLT and the Hyperledger fabric in particular.”

The press release also noted that DLT has made progress with data confidentiality and security, governance, and ID frameworks, proving that this new technology can support “financial multi-bank applications.”

Stephen Gilderdale, SWIFT’s Chief Platform Officer, stated that it is a “strategic priority” for SWIFT to look into DLT:

“We are already working on new PoCs and will continue our R&D efforts to ensure that SWIFT customers will be able to leverage their existing SWIFT infrastructure and connectivity to benefit from blockchain services, whether offered by SWIFT or by third parties, on a secure and trusted platform.”

However, the press release did note that prerequisites, like account servers migrating to real-time liquidity reporting and processing, would have to be met before the financial industry could adopt DLT on a large scale.

DLT technology will also need more development to be ready to support a large global infrastructure. The press release gives the example that 10,000 channels would be required to cover all current Nostro relationships, while the study only used 528.

As for the next steps going forward, the SWIFT report states that it will encourage its community to begin using real-time liquidity reporting and processing, as well as developing their platform to “complement it with DLT capabilities.”


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Re: Export All Avamar Groups Script

Hello All,

I have been looking for a process to export all Avamar groups from one grid and import them into another. I am aware of the following commands listed below, but this only exports/imports one group at a time. In the thread I linked at the bottom, someone mentioned a script that may have automated this for all groups. The problem is, this post is from several years back. Does anyone have a current solution to this? I am running Avamar 7.4.1-58. Thanks everyone!

mccli group export –name=group-name –file=filename.xml

mccli mcs import –file=filename.xml –target-domain=domain-to-import-to

Avamar Dataset export


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Peter Marshall: President Trump crosses the line

Dear Editor:

This paper has published numerous letters over the last 18 months reflecting a stark partisan divide within Routt County regarding the ability of Donald Trump to carry out his responsibilities as President of the United States. While that divide persists, the weekend before last saw President Trump cross a line that ironically, and unfortunately, may well result in somewhat more consensus regarding our President’s performance in office.

Special Counsel Robert Mueller and the Department of Justice announced the indictment of 13 Russian individuals and three Russian entities for widespread efforts to undermine the 2016 Presidential election. It is clear from the limited focus of the indictments that they covered only a portion of the “information warfare” conducted by Russian related individuals and entities.

One can certainly disagree whether the original intent of Russian’s meddling was to support candidate Trump or simply to sow chaos regarding the results of a probable Hillary Clinton victory. One can also disagree whether the meddling affected the outcome. However, that would miss the point.

Shortly after the announcement of the indictments, President Trump’s own National Security Advisor H. R. McMaster confirmed what the entire U. S. Intelligence Community has been reporting for the last year, i.e. that the evidence of Russian interference in the 2016 election is “incontrovertible.”

Nonetheless, President Trump’s response to the indictments has been to criticize everyone except Russia. In a tweet flurry President Trump criticized the FBI, CNN, the Democratic Party, his own national security advisor, former President Barack Obama as well as the top Democrat on the House Intelligence Committee. Yet not a word was uttered criticizing the Russian government or its leader Vladimir Putin.

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More importantly, Trump’s Twitter blast overshadowed last week’s Senate testimony of the heads of the six major U.S. intelligence agencies that uniformly agreed that Moscow’s next target is the 2018 midterm election. Dan Coats, the director of national intelligence, went so far as to say that the United States is currently “under attack.”

One can disagree about why the President has refused to criticize Moscow or to take any actions to protect the sanctity of the 2018 vote. However, President Trump, like all federal officials, took an oath to “protect and defend” the United States Constitution. Most reasonable people would agree that oath includes protecting and defending the American electoral system.

If as the U.S. intelligence community agrees, we are currently under attack, the President has an obligation to defend us and our elections. Yet, all President Trump has done to this point is refuse to enforce the sanctions already passed by the Congress against Russia.

This leads to the fundamental question each of us must answer for ourselves. If we can agree that President Trump has an obligation to protect and defend the sanctity of the American electoral system, how are we to interpret his lack of outrage at the conduct of Moscow; let alone his failure to lead, or at least not obstruct, the effort to ensure that Russians are not allowed to engage in further cyber-warfare against the U.S. in the upcoming 2018 midterm elections?

However each of us answer that question, we should all be prepared, regardless of political persuasion, to immediately contact the offices of Senator Cory Gardner, Senator Michael Bennett and Representative Scott Tipton and implore them to take whatever legislative steps are necessary to insure the integrity of the 2018 midterm elections. If President Trump refuses to be a willing participant in that effort, the Congress must take that obligation upon itself.

Peter Marshall



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We Are Still A Sitting Duck For Russian Hacking

Trump, no slouch at undermining both, has a foreign enabler. So while his generals, his intelligence chiefs, the Department of Homeland Security and most Republicans in Congress take this threat very seriously, Trump is delighted to surf it. While special counsel Robert Mueller is still sorting out what occurred in 2016, Trump’s tacit acceptance of ongoing Russian threats is every bit as much of a potentially impeachable offense as his initial wink-and-nod understanding with Putin.


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Is China ready for what US could unleash in trade war?

As rumblings of a trade war between Washington and Beijing grow louder, the Trump administration appears to be gearing up for renewed confrontation with China.

The signs have been clear. Last month, Donald Trump’s move to slap punitive tariffs on solar panels and washing machines, mostly on imports from China, was an opening salvo, while the “renegotiation” of the Nafta and Korea-US (KORUS) free trade agreements has drawn the most attention.

It’s a matter of time before Trump and China embrace the TPP

But these moves are just a small part of the policy arsenal Washington could unleash under the banner of “national security interests” to monitor, control and block commercial activities between Chinese and American entities.

Watch: Trump’s new tariffs spark outcry in Asia

This month Wendy Cutler, a former US government trade official, made an ominous warning towards China, saying the tariffs were “just the beginning of a series of announcements that will be coming”.

There are a variety of show-stopping actions the administration could take, with little or no warning, including: blocking foreign acquisitions or deals with firms and industries Washington considers “nationally sensitive”; new or increased sanctions against individuals, companies and countries; and introducing new export licensing requirements for seemingly benign materials and components – causing rapid disruption to global supply chains.

Locked and loaded, China and the US are heading into a trade war

These scenarios fall under the lengthening shadow of what are known as strategic industries and economic security, through which more than a dozen US federal agencies enforce hundreds of regulations and restrictions.

Any enterprise that fails to realise the gravity of these measures will have calamity visited upon it. Take the example of Chinese telecoms firm ZTE, which recently paid out US$892.4 million in penalties to US government agencies. ZTE violated export controls and sanctions regulations on shipments of US origin materials to Iran and North Korea.

Despite being major trading partners – with all of the benefits this brings to both sides – Beijing and Washington are both pursuing increasingly self-serving agendas based on national security, and that seems destined to intensify.

Trump’s first year failed the China test. His second looks far worse

Important technology sectors have been pulled into the fray and the rivalry has spilled over into cyber warfare, espionage and the militarisation of space.

The consequences of this growing power rivalry are deadly serious. Recent reports of a supposed spy-killing campaign in China, reportedly instigated by Jerry Chun Shing Lee, a CIA-agent-turned mole – are a sobering reminder of this reality.

In the latest round of blocked Chinese business ventures, the US Federal Communications Commission (FCC) last month forced AT&T to back out of a major deal with the Chinese smartphone maker Huawei.

The deal would have made Huawei, the world’s largest maker of telecommunications equipment, a major supplier of phones to AT&T’s customers. However, the firm has long been suspected by US lawmakers of links to Beijing’s economic and political policy apparatus. Huawei’s founder, Ren Zhengfei, was an officer in the Chinese military.

Why a cooling in China’s economy would be a good thing

Although Huawei is a private company, most US authorities are convinced that virtually all big Chinese companies have murky ties to Beijing’s power circle. The thought of millions of American consumers using Chinese-made phones with secret “back doors” and data-tracking features written into the operating systems was enough to kill the deal.

Since 2012, Huawei had been blocked from selling network equipment to US telecommunications carriers, so the latest rebuff on telephone sales has dealt a major blow to the company, essentially locking it out of the world’s largest economy.

Another recent deal blocked on similar grounds saw Ant Financial, the fintech arm of Chinese internet giant Alibaba, which also owns the South China Morning Post, being barred from purchasing Moneygram, the US money-transfer company. The deal, worth US$1.2 billion, was killed by the Committee of Foreign Investments in the US, on the grounds that Chinese interests would have access to the private data of millions of Americans.

Sovereign wealth funds: just a way for China and Russia to flex muscles?

In the current climate in Washington, espionage and sabotage are on equal footing with the fear of losing competitive advantage in critical sectors, particularly in semi-conductors, artificial intelligence and robotics.

In September, the Trump administration took its first major action when it blocked Canyon Bridge Fund – owned by Chinese state-backed entities – from buying Lattice Semiconductor Corporation, a cutting edge American tech company. This trend will continue into 2018, and probably intensify, as Chinese firms increasingly target hi-tech acquisitions.

Watch: China-US relations in Trump era

Beijing, of course, is no stranger to blocking foreign companies from operating in its markets. Google, Facebook and Twitter have all been blocked from providing services in rulings motivated as much by security concerns as they were designed to protect local Chinese firms.

The only game in town? Why China will keep buying US Treasury debt

The Chinese are also said to have reacted to Edward Snowden’s divulgence of the NSA’s surveillance activities in China by excluding US vendors Cisco and Apple from approved government supplier lists.

How far will this all go? And will claims of national security serve as instruments of trade protectionism? No doubt, they will.

International businesses should get ready for a bumpy ride ahead.

Alex Capri is a visiting fellow at the Department of Analytics & Operations at National University of Singapore Business School


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Kasich’s Team Gears Up for Possible 2020 Run

John Kasich’s inner circle is gearing up for a possible presidential run in 2020 — actively weighing the prospect of a Republican primary challenge to President Donald Trump against the feasibility of a long-shot general election campaign as an independent.

And there’s one consideration driving their thinking perhaps more than any other: what some of his advisers consider the very real, maybe even likely, possibility that Trump doesn’t run again — by choice or not — or that the president becomes so politically hobbled by late next year that the political landscape fundamentally shifts in Kasich’s favor. That’s one reason Kasich has yet to decide whether to pursue an independent bid or a primary challenge.

Nine Republicans in or close with Kasich’s political operation told POLITICO that the departing Ohio governor has been working with a tight clutch of advisers and informally surveying donors and fellow pols about the shape of his next steps. So far, he has solidified his role as a go-to commentator for national news shows while stacking his schedule with trips including an April return to New Hampshire.

None of this is to say Kasich is a go for 2020. But his activity has undergone a marked shift from just a few months ago, when Kasich and his allies repeatedly denied any interest whatsoever in the White House, even as he embarked on a book tour.

View Full Story From Politico


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