Today Broadridge announced that HSBC is the second bank to adopt its Distributed Ledger Sponsored Repo solution. UBS was the first client to sign up last month and has also used the core Distributed Ledger Repo (DLR) offering since 2021.
With the core DLR, repo trades are agreed, executed and settled on the ledger. Settlement triggers conventional payments. In contrast, Sponsored Repo is centrally cleared through FICC, the U.S. central counterparty. It allows sponsoring members to let their clients or group affiliates use FICC clearing.
Currently the Broadridge DLR solution has monthly volumes of around $1 trillion. Its workflow uses smart contracts developed with DAML, the language from Digital Asset.
“Digitizing our existing sponsored repo trade flow and seamlessly integrating it into Broadridge’s DLR tech stack empowers us to enhance efficiencies, mitigate risks of transaction failures, and significantly lower settlement costs,” said John Farrell, Americas Head of Markets Operations, HSBC. “We are committed to exploring innovative avenues to reduce operational risks, and we believe this platform will be instrumental in achieving our objectives.”
HSBC has ramped up its engagement with blockchain across the board. Earlier this month it unveiled a tokenized gold solution for institutional clients. Plus, it trialed tokenized deposits with two separate partners, Ant and Visa. HSBC has also been an active participant in the Regulated Liability Network experiments in both New York and London.
That’s not to say HSBC is new to blockchain. It has been using DLT for FX since 2018 and its FX Everywhere solution has processed around $6.7 trillion in transactions.
