Luxembourg-based financial technology firm HQLAX has achieved a significant milestone, saying its distributed ledger technology platform surpassed €1bn in delivery versus delivery (DvD) securities lending transactions. This announcement, made by the company on 6 June 2024, came as HQLAX disclosed that major financial institutions BNY Mellon, Goldman Sachs International and HSBC successfully conducted transactions surpassing the €1bn in notional value on its DLT platform.
DvD transactions involve the simultaneous exchange of securities versus securities. The DLT platform facilitates the creation of digital collateral records (DCRs), enabling the seamless ownership exchange of loan s and triparty collateral on a delivery versus delivery basis. Notably, this eliminates the need for further market settlement, thereby mitigating intraday exposure and associated credit risks prevalent in conventional collateral settlement practices, stated the press release.
Key players in this achievement include BNY Mellon’s triparty platform, which provided safekeeping and collateral management services, and Pirum’s post-trade triparty connectivity infrastructure, enabling real-time calculation and adjustment of required collateral.
Commenting on this milestone, Nehal Udeshi, global head of securities finance at BNY Mellon, expressed interest in exploring the broader industry possibilities that DLT can offer. Similarly, Amar Amlani, head of EMEA digital assets at Goldman Sachs, hailed the transition into the scaling phase of activity, emphasising the tangible benefits of precise, simultaneous collateral movement now being demonstrated on a business-as-usual basis.
Jamie Anderson, head of collateral treasury trading at HSBC, highlighted the HQLAX platform’s role in reducing intraday credit and collateral risk while enhancing efficiency in securities lending trades for both lenders and borrowers. Anderson expressed eagerness to continue collaborating with HQLAX and key partners.
Guido Stroemer, chief executive officer of HQLAX, described the achievement as a significant milestone for the platform and a transformative development for the securities lending industry at large, marking the successful deployment of agency securities lending DvD functionality.
The success of HQLAX’s DLT platform in facilitating DvD securities lending transactions underscores the growing acceptance and adoption of DLT within the financial services sector, paving the way for further innovation and efficiency gains in securities finance markets, commented HQLAX.