JP Morgan has carried out the first live transaction utilising distributed ledger technology (DLT) to mobilise collateral for PGGM on Eurex Clearing.
Danny Hand
The underlying service went live earlier this July and enables the transfer of securities collateral from a custodian location to Clearstream for use as margin collateral at Eurex Clearing.
The solution, developed with technology from HQLAx and supported by Clearstream’s custody infrastructure, facilitates near-instant access and mobilisation of collateral assets independent of their physical location.
Danny Hand, prime financial services product development at JP Morgan, said: “JP Morgan’s participation as the clearing member in the world’s first live DLT-based collateral transaction for cleared derivatives initial margin demonstrates our commitment to innovation and our belief in the transformative power of DLT for collateral management across the industry.”
The solution is designed to improve the efficiency of collateral management and support liquidity needs.
Eurex Clearing, part of Deutsche Börse Group, received regulatory non-objection from BaFin for this approach.
The initiative forms part of Eurex Clearing’s broader efforts to integrate digital technologies into its collateral management processes.
Anja Kleefsman, head of treasury and liquidity management at PGGM, said: “PGGM is delighted to be part of this first live DLT-based collateral mobilisation transaction initiated to meet our margin obligations at Eurex Clearing. Optimising our collateral management is a key priority and an element that plays an important role here is the ease of moving collateral.”
Kleefsman added: “Instant access to and mobilisation of collateral assets provided by this DLT-based technology is a major step forward and we welcome this innovation. We’re looking forward to the industry’s further adoption of this solution and leveraging its benefits.”