Deutsche Börse and HQLAx’s securities lending solution progresses
29 January 2019 Frankfurt
Image: Shutterstock
Deutsche Börse and HQLAx revealed that their blockchain securities lending solution is showing significant progress since March last year when it was announced that cooperation for a securities lending offering based on R3’s Corda blockchain solution.
The HQLAx target operating model is an innovative solution for collateral swaps in the securities lending market, Deutsche Börse revealed.
It aims to facilitate more efficient collateral management of high-quality liquid assets, which are in heightened demand due to increased clearing and margin requirements under Basel III regulations.
Unlike in traditional settlement, there will be no actual movement of securities between custody accounts on the HQLAx target operating model.
Instead, tokens will be transferred while the underlying securities will be kept off-blockchain and remain static.
According to Deutsche Börse, this helps market redistribute liquidity more efficiently by providing collateral mobility across systems and locations.
The platform will be accessed via Deutsche Börse’s Eurex Repo trading system. A trusted third party layer will be the interface between the distributed ledger technology (DLT) and legacy securities infrastructure.
This will leverage well-established triparty collateral management services, according to Deutsche Börse.
Meanwhile, six banks have confirmed that they have already started their onboarding processes and will join the platform at launch date, which is expected in H1 2019.
Guido Stroemer, CEO of HQLAx, commented: “The interest and commitment shown by the market prove that blockchain can bring tangible benefit to our industry. In Deutsche Börse, we found the perfect partner to exploit this potential. The increased shareholdings confirm their strong commitment to our business and the joint solution.”
Jens Hachmeister, in charge of blockchain initiatives across Deutsche Börse Group, said: “This blockchain use case reveals the significance and potential of the technology. This creates higher liquidity, transparency and efficiency for financial markets in general and securities financing in particular. We look forward to applying DLT for further solutions along the whole value chain."
Philippe Seyll, CEO of Clearstream Banking S.A., added: “We are thrilled to see the progress of the platform. It shows the technology’s potential to enhance collateral liquidity management by lowering obstacles between different systems and locations.”
The HQLAx target operating model is an innovative solution for collateral swaps in the securities lending market, Deutsche Börse revealed.
It aims to facilitate more efficient collateral management of high-quality liquid assets, which are in heightened demand due to increased clearing and margin requirements under Basel III regulations.
Unlike in traditional settlement, there will be no actual movement of securities between custody accounts on the HQLAx target operating model.
Instead, tokens will be transferred while the underlying securities will be kept off-blockchain and remain static.
According to Deutsche Börse, this helps market redistribute liquidity more efficiently by providing collateral mobility across systems and locations.
The platform will be accessed via Deutsche Börse’s Eurex Repo trading system. A trusted third party layer will be the interface between the distributed ledger technology (DLT) and legacy securities infrastructure.
This will leverage well-established triparty collateral management services, according to Deutsche Börse.
Meanwhile, six banks have confirmed that they have already started their onboarding processes and will join the platform at launch date, which is expected in H1 2019.
Guido Stroemer, CEO of HQLAx, commented: “The interest and commitment shown by the market prove that blockchain can bring tangible benefit to our industry. In Deutsche Börse, we found the perfect partner to exploit this potential. The increased shareholdings confirm their strong commitment to our business and the joint solution.”
Jens Hachmeister, in charge of blockchain initiatives across Deutsche Börse Group, said: “This blockchain use case reveals the significance and potential of the technology. This creates higher liquidity, transparency and efficiency for financial markets in general and securities financing in particular. We look forward to applying DLT for further solutions along the whole value chain."
Philippe Seyll, CEO of Clearstream Banking S.A., added: “We are thrilled to see the progress of the platform. It shows the technology’s potential to enhance collateral liquidity management by lowering obstacles between different systems and locations.”
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