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Guernsey: "First" Incorporated Cell Company Core Admitted to TISE

Guernsey Flag-SF
July 31, 2018

In 2017, Dom Re IC, an incorporated cell of Solidum Re, a Guernsey incorporated cell company (ICC), issued what were believed to be the first notes to have been digitized on a private blockchain. Referred to as "ILSBlockchain," the mechanism replaced the role of a traditional settlement system for the note issue.

According to We Are Guernsey, in another first, Solidum Re (Guernsey) ICC recently became a member of the Guernsey-headquartered International Stock Exchange (TISE).

In 2011, the Solidum Re Eiger IC was admitted to the exchange's official list in what was the first private catastrophe bond transaction to be listed on any exchange worldwide.

Cedric Edmonds, director of Solidum Re (Guernsey) ICC, said, "It is very exciting to be part of another set of first and I am looking forward to bringing more innovative [insurance-linked securities (ILS)] transactions to an exchange that combines cost-effectiveness and convenience with global standards and international recognitions."

Mr. Edmonds said that his interest in the blockchain started in 2016 when he developed problems with his banking relationships. He lost access to Euroclear, the specialist in securities transactions, and found trying to secure access through other banks was difficult.

"I thought, can we do something ourselves?" he said. "I thought about blockchain and wondered if it would be a possible solution. I searched on the net, found a potential solution, and it seemed to work. We wouldn't be transferring physical money around; it would be transferring beneficial interests in real world assets."

The solution was to turn the business into its own paying agent, using a High Street bank, and its own settlement system—the ILSBlockchain. Participants on the ILSBlockchain hold assets on their own node, they are responsible for their own server and keeping their keys safe, and with no custody bank and no fees, trading happens instantly.

"This way we reduce costs and complexity, it involves fewer people, the documentation process is simpler, things happen quicker, and it's cheaper," he said.

Through the membership of TISE, Mr. Edmonds intends for Solidum Re (Guernsey) ICC to sponsor the listing of its incorporated cells' own debt securities and potentially Solidum Partners AG's investment vehicles on the Guernsey exchange. It is the first time that the core of an incorporated cell company has been admitted as a member of TISE, which is home to some world-first listed ILS transactions.

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