Currently, there isn’t a centralized securities lending platform in Israel. Hence, more than two years ago, the Tel Aviv Stock Exchange (TASE) set out to create a blockchain-based securities lending platform. Today it says members started testing in March and it will launch the solution in November.
Because most Israeli securities lending is currently inter bank or outside of banks, the aim is to increase the capacity to lend larger volumes by launching a blockchain-based platform.
The centralized solution uses distributed ledger technology (DLT) Hyperledger Sawtooth. By sharing the data between organizations, there is no need for reconciliations, which makes lending and unwinding positions aster and cheaper. TASE outlined the benefits of peer-to-peer transactions, smart contracts, security through immutability, and cost reductions.
“The Blockchain technology will present a new level of safety for securities lending and will support growth for transactions based on this new platform,” said Orly Grinfeld, EVP and Head of Clearing at TASE. “TASE is a global financial innovation leader, and strategically pursues the technological advancement of the capital market.”
Other securities lending and collateral solutions include Spanish stock exchange group Bolsas y Mercados Españoles (BME), which is live with collateral pledges. BME is now part of the Swiss SIX group.
OCC, the world’s largest derivatives clearing firm, is working on a securities lending platform with Axoni.
And the highest profile blockchain collateral swap platform is the HQLAX solution in association with the Deutsche Börse.