Clearstream will provide a fully digital alternative to conventional physical issuance for approximately 80 percent of German securities, including warrants and certificates with further asset classes and jurisdictions planned in the future.
Clearstream, Deutsche Börse’s post-trade service provider, has reached created a digital instrument on D7, Deutsche Börse’s digital post-trade platform, showing European issuers they can now leverage the new infrastructure to issue digital securities.
D7 is fully integrated within Clearstream’s global infrastructure and works as a connector between established networks and digital capabilities. LBBW and Vontobel have already performed the first automated issuances facilitated by Clearstream.
German securities, which have been issued as paper-based global notes and stored in a physical vault at the central securities depository, were recently allowed by BaFin to be dematerialized, paving the way for automation in the securities lifecycle.
Representing electronic securities, the digital instrument contains all the relevant information needed throughout the lifecycle of a security, such as reference, listing and legal data, corporate actions and reporting information.
Smart digital securities enable same-day issuance, automated straight-through processing and asset servicing of securities across established and new financial networks and infrastructures. It serves as a facilitator to streamline operational efforts, minimise reconciliation needs and reduce overall risk.
Clearstream will provide a fully digital alternative to conventional physical issuance for approximately 80 percent of German securities, including warrants and certificates with further asset classes and jurisdictions planned in the future.
Milestone toward fully digital market infrastructure in Germany
Jens Hachmeister, Head of Issuer Services & New Digital Markets at Clearstream, commented: “In line with our core mission to run innovative and future-proof infrastructures for our customers and the entire industry, we have now created the smart digital security. This moves issuance of structured products from days to minutes and enables our clients and partners to quickly adapt to the changing market environment. We are accelerating time to market and unlocking an entire new universe of product opportunities as we continue to venture towards fully digitised markets.”
Jan Krüger, Head of Equity Markets at LBBW, said: “In addition to a highly automated trading process, a digitalised and efficient issuance and settlement process is of great importance for the retail-certificate business. With the first pilot issue of an LBBW bonus certificate via the D7 platform, accompanied by Clearstream, we are taking the next technologically important step towards end-to-end digitalisation.”
Markus Schenk, Head Issuance Europe, Vontobel, added: “The launch of the Digital Instrument represents a milestone on the way to a fully digital market infrastructure in Germany. The ability to bring our structured securities to market faster and more cost-efficiently in the future will ultimately have a positive impact on the client experience. We at Vontobel are proud to accompany the project from the very beginning and to provide valuable input. It was important for us to play our part in this significant market infrastructure project.”
