Atomic delivery versus delivery (DvD) of securities
Challenge
- Capital for collateral requirements and payments was being cleared and settled on legacy systems, which led to increased cost, friction and trapped liquidity that could be deployed elsewhere.
Solution
- HQLAX enables atomic DvD for baskets of securities residing at multiple custodian – reducing consumption of intraday credit and intraday liquidity
- Enables interoperability across custodians, transfers of ownership/ pledge at precise times during the day, reduction in intraday credit exposures and intraday liquidity requirements
- Why Corda? Chosen for its transparency, risk compression and privacy, as well as it being an established enterprise platform
Results
- Instant settlement enables delivery versus delivery (DvD)
- DvD reduces consumption of intraday credit and intraday liquidity, providing capital savings
- Brings transparency across participants to reduce risk exposure
