UBS has signed up to use Broadridge’s new distributed ledger repo (DLR) trading platform that aims to transform the repo market using blockchain technology.
The DLR platform leverages the fixed income platform at Broadridge, which includes 20 of the 24 primary dealers and processes more than $6 trillion in average daily volume.
DLR, which launched in June, allows market participants to agree, execute and settle repo transactions on a decentralised platform.
Using smart contracts from blockchain specialists Digital Asset and VMware Blockchain, firms can transfer ownership of underlying securities on the platform without physically exchanging. Typically in the repo market, firms swap collateral for cash on a bilateral basis.
“We look forward to the enhanced liquidity and reduction of risk that Broadridge’s distributed ledger repo platform provides,” Paul Chiappetta, Americas COO of group treasury at UBS, commented. “This partnership reinforces our overall digital strategy, leveraging new technologies aimed at reducing risk and improving efficiencies in the financial markets.”
DLR, which Broadridge said will reduce operating cost and risk of all repo activity, executed over $30 billion in average daily volume in the several weeks since it went live. Broadridge also carried out multiple pilots of the DLR platform ahead of launch with buy- and sell-side firms, including Societe Generale and Natixis.
“In the first weeks since launch, DLR has executed $35 billion in average daily volume – a testament to the success of the platform, which we expect to continue to grow as additional clients join the platform,” added Vijay Mayadas, president of capital markets at Broadridge.
“We are excited to welcome UBS onto the platform and to continue to bring significant benefits in the form of enhanced liquidity, reduction of risk and operational efficiencies to our clients and the industry.”