HQLAᵡ is a financial technology innovation firm that leverages R3’s distributed ledger technology, Corda, to enhance collateral mobility in the global securities financing markets. HQLAᵡ is creating a fit for purpose, standardised, single marketplace to enable institutional treasurers to:
In March 2018, Deutsche Börse Group and HQLAᵡ announced a strategic partnership to develop a blockchain solution for collateral swaps in the securities lending markets. The joint operating model will improve collateral mobility across a fragmented securities settlement ecosystem. Unlike in traditional settlement, there is no movement of securities between custodians in the HQLAᵡ operating model. Instead, a digital collateral registry is used to record ownership transfers of baskets of securities, whilst the underlying securities remain static in the custody location of the collateral giver. This helps market participants manage collateral more efficiently and improves fluidity across siloed collateral systems and locations.
Market access to the HQLAᵡ operating model will be provided by the renowned Eurex Repo trading system. A newly created trusted third-party entity, owned and operated by Deutsche Börse Group, will interface between the distributed ledger technology and legacy securities infrastructure, leveraging well-established triparty collateral management services from multiple triparty agents. The joint operating model will go into production in Europe later this year.