Capital markets News

DLT collateral platform HQLAᵡ passes €1 billion mark for agency securities lending


Distributed ledger platform HQLAᵡ recently launched its agency securities lending offering and has passed the €1 billion mark in outstanding balances. BNY Mellon, Goldman Sachs, and HSBC were the initial banks that participated.

HQLAᵡ went live with its core securities lending offering in 2019, initially targeting banks looking to swap collateral amongst themselves. The pilot agency transaction took place almost two years ago. It expands the service to asset managers with the banks acting as their agents.

From the start the company has addressed a pressing need. Collateral is locked in numerous custodian silos and transactions take two days to settle. HQLAᵡ has partnered with triparty agents and custodians so the collateral stays put, but the ownership record – a digital collateral record (DCR) – is transferred via its DLT platform. That makes intraday delivery versus delivery (DvD) settlement possible.

In this case, the DvD involves exchanging Loan ISINs and Triparty collateral.

“Having been early adopters of HQLAᵡ’s DLT based solution, it’s fantastic to see the transition into the scaling phase of activity where previously theoretical benefits such as the precise, simultaneous movement of collateral are now being demonstrated in size on a BAU basis,” said Amar Amlani, Head of EMEA Digital Assets, Goldman Sachs.

“We are no doubt still in the early stages of adoption and there are a number of additional benefits and efficiency gains to be derived – we are looking forward to continuing working with HQLAᵡ, our clients and counterparts to scale balances along with expanding applications of DLT across products.”

For HQLAᵡ those other applications include repo and margin management.

Meanwhile, two months ago HSBC led the company’s Series C funding round, which included participation by several existing backers such as BNP Paribas, BNY Mellon, Citi, Deutsche Börse, Goldman Sachs and JP Morgan.

Image Copyright: Composite Ledger Insights