Following the ongoing progress of the HQLAx target operating model by Deutsche Börse Group and HQLAx, Clearstream, Deutsche Börse Group’s post-trading services provider, will act as custodian.
Additionally, Deutsche Börse is in advanced discussions with further custodians to participate.
The target operating model is an innovative blockchain solution for collateral swaps in the securities lending market and is showing significant progress, Deutsche Börse revealed.
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 participants to 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.
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, 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.”
.jpg)