Axoni-Organized Group Completes Blockchain Experiment for Equity Swaps Processing
Distributed-ledger vendor's group included five Tier-1 banks.
The experiment was able to show the efficiency improvements and cost savings around mark-to-market calculations, margin payments and corporate action processing when done on a permissioned ledger.
Barclays, Citi, Credit Suisse, JPMorgan and one undisclosed Tier-1 bank were involved in the project. IHS Markit, Thomson Reuters and Capco also participated.
The experiment, which lasted several months, involved establishing a blockchain trade processing network via hosted and locally installed deployments of Axoni Core, the vendor's proprietary distributed-ledger software. Automated lifecycle management was tested, as well as synchronization of single-stock, index and portfolio swaps.
The firms conducted 133 test cases, all of which were a success, to examine functional and non-functional capabilities of blockchain technology in the equity derivatives space.
Deep Dive of Test
As part of the tests, smart contracts were created from simulated legal confirmations through IHS Markit's MarkitSERV and trades sent by dealers on the distributed network. Event processing and payment calculations based on market events were handled by economic terms and computational logic put in the smart contracts.
Thomson Reuters BlockOne for Datascope was integrated with Axoni's software to offer valuations and include market data on the blockchain.
Over 50 tests were also done on the Axoni Core infrastructure, including adding and removing permissions for participants, updating protocol in a simulated live environment, monitoring the capacity to process messages, and testing the resiliency of the technology during network events. Transparency of the system for regulators was also tested.
"Complex contracts, a distributed market structure, and replicated workflows across many parties make blockchain technology a natural fit for equity derivatives," said Greg Schvey, Axoni CEO, in a statement. "Moreover, demonstrating this can be achieved on the same technology also utilized to optimize post-trade asset servicing for credit derivatives further proves the multiplicative value of deploying this infrastructure. It was a pleasure to work with exactly the type of influential and forward-thinking parties required to make this project impactful."
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Emerging Technologies
Ice moves to meet demand for greater cloud, AI capabilities
The exchange also outlined competitive advantages behind managing its data and cloud strategy internally during its Q1 earnings call on Thursday.
FactSet looks to build on portfolio commentary with AI
Its new solution will allow users to write attribution summaries more quickly and adds to its goal of further accelerating discoverability, automation, and innovation.
How Ally found the key to GenAI at the bottom of a teacup
Risk-and-tech chemistry—plus Microsoft’s flexibility—has seen the US lender leap from experiments to execution.
The IMD Wrap: Beginning of the end for data audits?
This week, there’s exciting news for data bean-counters in the form of a partnership between two vendors that could change the way we view and track data usage and audits.
S&P debuts Spark Assist genAI copilot, draws up ‘Blueprints’ of combined datasets
S&P’s Kensho subsidiary has rolled out new emerging tech products leveraging AI to explore and combine the vendor’s wealth of datasets to solve common use cases.
Nasdaq reshuffles tech divisions post-Adenza
Adenza is now fully integrated into the exchange operator’s ecosystem, bringing opportunities for new business and a fresh perspective on how fintech fits into its strategy.
Liquidnet sees electronic future for gray bond trading
TP Icap’s gray market bond trading unit has more than doubled transactions in the first quarter of 2024.
Most read
- Chris Edmonds takes the reins at ICE Fixed Income and Data Services
- DTCC urges affirmation focus ahead of T+1 move
- FactSet looks to build on portfolio commentary with AI