Natwest has issued a Yen 1 billion five-year note as a pilot using the London Stock Exchange’s DCM Flow platform to streamline the process. Flow is a solution that automates digital debt issuance, powered by Nivaura, a startup that has developed smart legal documents and digital term sheets. The London Stock Exchange is a significant Nivaura investor.
The company developed the General Legal Mark-up Language used in the Flow platform and brings issuers, dealers and legal advisers together in the negotiation process. Ultimately the goal is to make issuance faster, easier and less costly.
“We successfully used the platform to originate the deal, negotiate and sign legal documentation,” said Clare Goold, Head of Syndicate Transaction & Execution Management, at NatWest.
While Nivaura regularly works with blockchain and DLT, we’re awaiting confirmation of whether this particular transaction used the technology. Either way, Natwest sees the automation of issuance as a stepping stone.
“The future of digitalisation is based on two main pillars: the first being the digital journey of automation of processes, straight-through processing for customers and direct OMS (order management system) integration,” said Chris Agathangelou, Head of Digital Capital Markets and Flow Credit.
“The second pillar is the overhaul of the technology stack and an integration of Distributed Ledger Technology in the execution and settlement of transactions. This will happen across payments, cross-border, repo and issuance, to name a few. Embracing these new technologies will allow us to further increase the transparency of the capital markets.”
While this one is bond issuance, earlier this year, Nivaura and Natwest collaborated on the payments front when they participated in a trial of the Fnality platform. Fnality is the blockchain-based settlement platform backed by 16 financial institutions, which goes live in October.