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Deutsche Börse will launch a fully digital post-trade platform from Q4 2021, taking advantage of the framework established by the recently enacted German digital securities law.
This digital platform, known as D7, will support distributed ledger-based technology and links to cloud-based services, enabling market participants to digitise financial products with connectivity to established central and distributed markets and infrastructure.
The German market infrastructure group indicates that this will provide the foundation for same-day issuance and paperless, automated straight-through processing across the full transaction value chain, embracing issuance, settlement, payments, custody and asset servicing for a broad range of digital securities.
Deutsche Börse is developing the D7 platform in association with its long-term technology partners Digital Asset and Microsoft, along with DLT-specialist R3 and VMware.
It has 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 roll out that is likely to extend to 2024.
In the first phase, scheduled to begin in November 2021, Clearstream Banking AG’s new digital register will provide the foundation for securities issuance and custody in alignment with new legislation introduced earlier in 2021 under the German digital securities law, eWpG. This central register will link through Clearstream Banking AG Frankfurt, the German CSD, to existing core post-trade infrastructure including the TARGET-2 Securities platform.
The group anticipates that by mid-2022, more than 80 per cent of German ISINs will be eligible to be digitised through the digital central register, enabling same-day issuance and paperless, automated STP for certificates and warrants issued at Clearstream Banking AG.
As an open platform, D7 will support decentralised and delivery-versus-payment (DvP) settlement and custody systems. This will offer connectivity to a range of existing DLT platforms, including FundsDLT for fund administration and distribution and HQLAx for collateral transformation and lending of collateral baskets.
Deutsche Börse executive board member responsible for pre and post-trading Stephan Leithner, 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 decentralised finance.
“It is time not only to digitise single processes. It is time to reinvent post-trading altogether for a stronger, more sustainable and digital future for securities markets.”
Christoph Böhm, Deutsche Börse CIO and COO, comments: “D7 reflects our strategic ambitions and the clear focus we put on fostering innovation and new technologies.
“We are creating the next generation of future-proof financial infrastructure for the digital era, delivering cutting-edge technology and services and paving the way for the transformation towards digital markets for our industry.”
