Deutsche Börse will launch a fully digital post-trade platform from the fourth quarter of 2021, taking advantage of the framework established by Germany’s recently enacted digital securities law.
This digital platform, known as D7, will support distributed ledger-based technology and links to cloud-based services, enabling market players to digitize financial products with connectivity to established central and distributed markets and infrastructures.
The German market infrastructure group says this will form the basis for same-day issuance and automated, paperless processing throughout the transaction value chain, encompassing issuance, settlement, transactions. payments, custody and asset management for a wide range of digital securities. .
Deutsche Börse is developing the D7 platform in association with its long-term technology partners Digital Asset and Microsoft, as well as with specialist DLT R3 and VMware.
It partnered with a number of financial services companies to deliver the project, including BNP Paribas, Citi, DekaBank, Deutsche Bank, dwpbank, DZ Bank, Goldman Sachs, Raiffeisen Bank International and Vontobel.
D7 will be implemented through a phased rollout expected to run through 2024.
In the first phase, which is expected to start in November 2021, the new digital ledger of Clearstream Banking AG will provide the basis for the issuance and custody of securities in accordance with the new legislation introduced earlier in 2021 under the German Law on numeric values, eWpG. This central register will be linked through Clearstream Banking AG Frankfurt, the German CSD, to the existing basic post-trade infrastructure, including the TARGET-2 Securities platform.
The group predicts that by mid-2022, more than 80% of German ISINs will be able to be digitized through the digital central ledger, enabling same-day issuance and automated, paperless STP for certificates and warrants. issued by Clearstream Banking AG.
As an open platform, D7 will support decentralized settlement and custody and delivery versus payment (DvP) systems. This will provide connectivity to a range of existing DLT platforms including FundsDLT for fund administration and distribution and HQLAX for the transformation of collateral and the lending of baskets of collateral.
Stephan Leithner, Deutsche Börse board member responsible for pre- and post-trade, says: “With D7, we are providing the financial community with a next-generation digital securities post-trade platform to unlock the potential of ‘truly digital and decentralized finance.
“It’s time not only to digitize unique processes. It’s time to completely reinvent post-trade for a stronger, more sustainable and digital future for the securities markets. “
Christoph Böhm, Deutsche Börse CIO and COO, comments: “D7 reflects our strategic ambitions and our clear focus on promoting innovation and new technologies.
“We are creating the next generation of future-proof financial infrastructure for the digital age, providing cutting-edge technologies and services and paving the way for transformation to digital markets for our industry. ”