SIX Securities Services develops solution for distributed ledger-based bond issuing
Posted: 17 March 2017 | Six Securities Services | No comments yet
SIX Securities Services, Switzerland’s post-trade market infrastructure, has developed – and intends to deploy – a distributed ledger technology (DLT) based solution that covers the entire bond life-cycle – from issuance to settlement.
In late September 2016 SIX Securities Services announced its partnership with Digital Asset Holdings to develop distributed ledger technology based solutions for the Swiss Financial Market.
The bond issuance prototype was presented at this year’s SIX Securities Services Post Trade Forum at the Andaz Hotel in London on the 16th of March. The solution enables bonds to be issued as smart contracts that specify which dates coupon payments are made; the exact amounts; and how/when repayments occur. It includes the connection of the smart contract to the chain where buyers can allocate money to the bond by paying in digitalised currency to the bond’s address.
The customer benefits of a distributed ledger based platform are numerous. They include: one single source of data stored on a ledger; agreed to – and used by – all parties to the transaction; being an immutable digital record of transaction data flows between market participants – secure, confidential and highly available; significant cost reduction through the removal of operational and reconciliation processes; and the reduction of settlement/counterparty risk and associated capital requirements.
Thomas Zeeb, CEO SIX Securities Services: “This is an interesting solution approach. Though still some way off for market-wide adoption, we are firmly of the belief that the potential shown here is promising – for us – and for the industry as a whole. It also demonstrates our philosophy of focus and determination to research technological advancement with minimal disruption to our existing business models. I am convinced that what we have achieved with this approach could revolutionise several processes used by the Swiss Financial Services Industry while sustainably securing our role in the provision of services throughout the Swiss Value Chain.”