DTCC and Accenture have introduced a governance operating model for distributed ledger technology (DLT) networks, with the aim of helping firms manage the risks and consequences when moving to these new platforms.
The model, proposed by the two companies in a joint white paper, addresses the responsibilities and critical functions in operating and maintaining a private, permissioned DLT platform.
This includes a governing function to make decisions that will affect activity, connectivity, software changes, contractual agreements and transaction finality for every participant across the entire DLT network.
“Distributed ledger technology, with its built-in consistency, security and privacy, holds great promise to transform the digital landscape, but DLT’s full potential will only be realized with the implementation of a strong and transparent governing model,” said Robert Palatnick, chief technology architect, DTCC.
The model seeks to address the issues surrounding day-to-day operations of a DLT platform, as well as data governance, infrastructure, legal and finance, third-party management and platform management.
DTCC is currently working with IBM, Axioni and R3 to re-platform its trade information warehouse (TIW), using a DLT solution for managing credit derivatives post-trade lifecycle events. Last year, DTCC also proved the technology would be capable of processing an entire trading day’s volume on the US stock market.
Market infrastructures and central securities depositories (CSDs) have been called to play a governance and operational role for DLT networks, which could help increase trust from investors, as well as raising the quality of the ecosystem infrastructure underpinning the technology.
“The power of DLT can deliver significant operational efficiencies to the industry which will only be fully realized if we ensure that we all know how to play and reap the benefits together,” said Wynn Davies, managing director, Accenture Capital Markets.