Broadridge launches DLT Repo platform to execute first bilateral repo trades using smart contracts
Broadridge Financial Solutions, Inc, a global Fintech leader, has announced the successful go-live of its transformative distributed ledger repo (DLR) platform. Early participants of the blockchain-enabled platform are realising significant and immediate benefits of reduced risk, operational costs and enhanced liquidity, while also accelerating their digitisation journey. The launch builds on the success of multiple pilots with sell-side and buy-side firms.
DLR provides a single platform where market participants can agree, execute and settle repo transactions. Furthermore, DLR allows for the immobilisation of the underlying securities in the repo transactions, while transferring ownership via smart contracts executed on the platform. The platform’s functionality significantly reduces the operating cost and risk of all repo activity, including intraday, overnight and term repos, both on a bilateral and an intracompany basis and also reduces counterparty risk while increasing auditability. In the first week since launch, DLR has executed USD31 billion in average daily volume.
“This is the first step in the transformation of the USD10 trillion global bilateral repo market using smart contracts and distributed ledger technology,” says Vijay Mayadas, President of Capital Markets at Broadridge. “Co-innovating with market participants, we are able to bring solutions to our network of clients that create the next level of operational efficiencies. Within the repo market, distributed ledger technology and smart contracts have shown that they can play an instrumental role in driving efficiencies, reducing risk and enhancing liquidity while leveraging the existing legal and account frameworks.”
Leveraging Broadridge’s leading fixed income trade processing platform, DLR utilises 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.
“By coupling emerging technologies like distributed ledger technology and smart contracts with existing operational account structure functionality, Broadridge has enabled real-time securities mobility in the repo market,” says Vinod Jain, Senior Analyst, Aite Group. “This is a powerful value proposition for firms, especially those looking to reduce risk and enhance operational efficiencies.”