LSEG’s Digital Securities Depository has received approval from the Bank of England to go live in the UK’s Digital Securities Sandbox, becoming the third firm to pass Gate 2 after HSBC in July and ClearToken in September. The approval allows LSEG’s DSD to record ownership, service assets and settle transactions on distributed ledger technology under Bank of England supervision.
The approval also covers a link between LSEG’s DSD and HSBC’s Orion platform, which will issue DIGIT, the UK government’s pilot digital gilt. Under the arrangement LSEG acts as an investor DSD, meaning institutions can hold and settle DIGIT through either infrastructure. Both firms still need the Bank of England to designate their systems under the settlement finality rules, which would give completed transfers statutory legal protection in the event of a participant’s insolvency.
HM Treasury appointed Barclays, HSBC, Lloyds, Morgan Stanley, NatWest and RBC Capital Markets as joint lead managers for DIGIT in October, with the first issuance targeted for Q1 2027. The LSEG approval was one of the last pieces of infrastructure the pilot needed on the investor side.
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