Deutsche Börse strengthens commitment to new technologies in the post-trade sector / Significant progress in creating innovative blockchain solution to tackle fragmentation of securities lending market
Deutsche Börse Group has just made an initial investment of a single-digit euro million amount in HQLAx S.à r.l. in exchange for a minority shareholding. With this step, the company further strengthens its ties with HQLAx, aiming to increase market efficiency in the fragmented securities lending market by leveraging innovative technologies in a collaborative way.
In March, Deutsche Börse Group had announced that together with HQLAx it is building a securities lending solution leveraging the R3 Corda blockchain platform. Over the last five months, significant progress has been made: The on-boarding process with an initial set of banks has been kicked off and detailed discussions with relevant regulatory authorities are taking place. The Group is likely to acquire further shareholdings in HQLAx around year-end.
As part of the investment, Deutsche Börse Group also obtains two board seats at HQLAx, represented by Philippe Seyll, who is in charge of the Group’s Global Securities Financing business, and Jens Hachmeister, responsible for the development of blockchain initiatives across the Group.
Philippe Seyll, Co-CEO of Clearstream Banking S.A., comments: “This collaboration will enable us to create a true blockchain-based solution in the post-trade arena. Together with like-minded partners such as HQLAx we want to create a standardised lending marketplace. It will allow market participants to redistribute collateral liquidity more efficiently by improving interoperability for pools of securities residing in multiple, disparate settlement systems and locations.”
Jens Hachmeister, in charge of blockchain initiatives across Deutsche Börse Group, commented: “We are thrilled to announce the investment in HQLAx, thereby bringing this collaboration further forward. This is a strong value added and complementary to other initiatives that we are developing in the blockchain and new technologies space across the entire value chain of our market infrastructure.”
Guido Stroemer, CEO of HQLAx, commented: “This investment represents a major milestone for HQLAx, and it is another example of Deutsche Börse Group’s strong commitment to our platform. We look forward to our journey into production.”
DB1 Ventures, Deutsche Börse’s corporate venture capital arm, will manage the investment in HQLAx. This is the second blockchain investment made by DB1 Ventures, which continues to deploy capital in innovative technologies that are core or adjacent to the strategy of the Group, including and beyond blockchain technology.
About Deutsche Börse Group
Deutsche Börse Group is one of the largest exchange organisations worldwide. It organises markets characterised by integrity, transparency and safety for investors who invest capital and for companies that raise capital – markets on which professional traders buy and sell equities, derivatives and other financial instruments according to clear rules and under strict supervision. Deutsche Börse Group, with its services and systems, ensures the functioning of these markets and a level playing field for all participants – worldwide. As a technology innovator, the company started a number of blockchain-related initiatives more than three years ago. These include, amongst others, an investment in Digital Assets Holdings.
HQLAx is a financial technology innovation firm that specialises in delivering liquidity management and collateral management solutions for institutional clients in the global securities lending and repo markets.