The distributed ledger repo (DLR) platform by Broadridge Financial Solutions has onboarded a heavy-weight of the trading industry, UBS.
This should provide extra visibility for the project and, in turn, obtain reduced risk and operational costs as well as enhanced liquidity for the investment bank. DLR provides a single platform where market participants can agree, execute and settle repo transactions.
UBS will also make use of Broadridge’s fixed income platform that processes over $6T in average daily volume and includes 20 of the 24 primary dealers.
“We look forward to the enhanced liquidity and reduction of risk that Broadridge’s distributed ledger repo platform provides,” said Paul Chiappetta, Americas Chief Operating Officer of Group Treasury at UBS AG. “This partnership reinforces our overall digital strategy, leveraging new technologies aimed at reducing risk and improving efficiencies in the financial markets.”
The digital repo approach precludes that collateral can be detached from the trade agreement, while the cash remains off-chain. Allowing for the immobilization of the underlying securities in the repo transactions, the blockchain-powered service transfers ownership via smart contracts executed on the platform.
All repo activity, including intraday, overnight and term repos, benefit from reduce operating cost and risk both on a bilateral and intracompany basis and reduces counterparty risk while increasing auditability.
“In the first weeks since launch, DLR has executed $35B in average daily volume – a testament to the success of the platform, which we expect to continue to grow as additional clients join the platform,” said Vijay Mayadas, President of Capital Markets at Broadridge. “We are excited to welcome UBS onto the platform and to continue to bring significant benefits in the form of enhanced liquidity, reduction of risk and operational efficiencies to our clients and the industry.”
The DLR platform went live in June, built on the success of multiple pilots with sell-side and buy-side firms. In the first week since launch, DLR executed $31B in average daily volume.
DLR utilizes Daml smart contracts from Digital Asset as well as VMware Blockchain, a highly scalable distributed ledger platform. DLR reduces operational risk and settlement cost for repurchase, or repo, agreements by providing a secure record of repo trade details, reducing the need for reconciliation and removing obstacles to straight-through-processing.
Broadridge Financial Solutions has appointed Ian Strudwick as General Manager and Head of Asia-Pacific (APAC), based in Singapore and reporting to Broadridge International President Samir Pandiri, the firm announced.