Broadridge’s Distributed Ledger Repo (DLR) solution processes a trillion dollars a month in transactions. At its heart, it’s a smart contract solution that governs agreements and workflow. Now Broadridge has expanded it beyond repo to the management of high quality liquid assets (HQLA) with a tier 1 Canadian bank adopting the new features.
When we chatted 18 months ago, Broadridge’s Horacio Barakat noted that the system was designed to be flexible and a client was already using it for outright cash transactions rather than repo.
Using the platform, the HQLA is locked and tokenized, supporting its transfer using smart contracts.
“This implementation not only simplifies their workflow and generates cost savings but also lays the foundation for further DLT use cases that can drive even greater efficiencies and innovation in the financial sector,” said Mr Barakat, who leads Digital Innovation at Broadridge.
We hope to add more detail later today.
Circling back to the repo use case, a key benefit of DLR is it supports any term, including intraday repo. Hence, large financial institutions often use it internally to ensure subsidiaries have the right collateral at the right time.
The cash leg can be settled in the conventional manner, in May DLR integrated with JP Morgan’s JPM Coin to support on-chain settlement, with the two blockchain technologies integrated via APIs.
Collateral mobility in Europe
While Broadridge expands from DLT repo to collateral management, on the other side of the pond, HQLAᵡ is going in the other direction. HQLAᵡ, backed by the likes of Citi, JP Morgan, Goldman and BNY Mellon, started as a DLT based collateral management solution which locks collateral at custodians enabling DLT-based settlement. Hence, it provides intraday collateral mobility without waiting two days for settlement.
It previously ran multiple repo trials, but more recently has tested an intraday repo solution with Eurex Repo F7 and Fnality for the on-chain cash leg. Subject to regulatory approval, they plan to launch it later this year.
