DTCC takes on ledger tech for repo trades

The Depository Trust and Clearing Corporation (DTCC) and Digital Asset holdings have revealed plans to develop distributed ledger technology in a bid to streamline repo transactions.

Currently the DTCC’s Fixed Income Clearing Corporation (FICC) provides the matching and verification of the start leg of the repo trade although it does not settle the start leg of same-day starting trades meaning the settlement of a repo start leg may occur in real time outside of FICC.

As a result of this initiative DTCC and Digital Asset will enable the FICC to become the settlement counterparty for repo transactions in real time.

Using distributed ledger technology will allow buy and sell-side firms to complete repo trades in a more efficient manner.

“Distributed ledger technology has the potential to revolutionise certain post-trade processes that are inefficient and complex, and repos are a great place to start,” said Mike Bodson, president & CEO of DTCC.

“This initiative reflects our strong commitment to leverage this technology and help lead the industry to further lower risk and increase efficiency across financial markets.”

Blythe Masters, CEO of Digital Asset said, “DTCC has an important role to play in the integration of a distributed ledger ecosystem with the existing financial landscape and this joint effort will accelerate innovation while decreasing cost and risk for our clients.”