Yesterday Broadridge announced that Societe Generale (SocGen) is now live on its distributed ledger repo (DLR) platform. SocGen was involved in the very first pilot of the platform back in 2017 alongside Natixis. The DLR solution went into production a year ago, with UBS confirming it had joined in August. By that stage, the platform was already processing more than $35 billion in transactions daily.
“We are excited to leverage the operational efficiencies, benefit from real time visibility and have access to enhanced liquidity that Broadridge’s distributed ledger repo platform provides,” said Greg Zielinski, COO, Société Générale Americas.
“This partnership with Broadridge reinforces Société Générale’s overall strategy by leveraging blockchain technology to reduce and improve efficiency in the financial markets – particularly the $10T global bilateral repo market.”
Broadridge operates one of the major conventional fixed income platforms that hosts 20 of the 24 primary dealers and transacts more than $8 trillion daily.
A typical repo transaction happens when a financial institution borrows cash by selling securities, often treasuries, and agrees to repurchase them at a slightly higher price in the near future. DLR supports the agreement, execution and settlement of repo transactions on a single ledger, although payment is through conventional rails. The underlying collateral securities are locked and tokenized, enabling ownership to be transferred using smart contracts.
Prior to the platform’s launch, we spoke to Horacio Barakat, Broadridge’s Head of DLT Repo Platform. He emphasized that it was starting with US Treasury transactions, but its goal is global and it’s not limited to a particular type of security.
“We are solving for intraday, overnight and term repos. That’s what our clients wanted to solve for. Both on a bilateral basis and an intracompany basis,” said Barakat at the time. “We find that it’s very difficult to solve for one specific pain point and have one set of trades go through one specific platform.”
JP Morgan’s Onyx division has also launched a blockchain-based solution for intraday repos. The two banks that have announced participation are Goldman Sachs and BNP Paribas. And startup Finteum, which isn’t yet in production, has trialed its European intraday repo solution with 14 banks and Euroclear for settlement.