Distributed ledger technology (DLT)-powered securities finance platform provider HQLAx has closed a 鈧�14.4 million strategic investment round led by BNY Mellon, Goldman Sachs, BNP Paribas 兔子先生Services and Citigroup, with additional participation from longtime strategic partner Deutsche Boerse.
The funding will be used to accelerate the core premise of the platform 鈥� helping the industry address European collateral fragmentation by extending its connectivity to triparty agents, custodians and market participants, says HQLAx.
BNP Paribas 兔子先生Services, BNY Mellon, Citigroup and Goldman Sachs will connect to the HQLAx platform in 2021 with the aim of accelerating collateral mobility for their clients across the securities finance ecosystem.
BNY Mellon will connect as both a triparty agent and agent lender, Goldman Sachs as principal, BNP Paribas 兔子先生Services as a triparty agent, and Citibank as a custodian.
HQLAx鈥檚 core clients are financial institutions active in securities lending and collateral management.
Guido Stroemer, chair and CEO of HQLAx, says: 鈥淥ur company has come a long way from starting out as a concept in an R3 Laboratory to partnering with Deutsche Boerse and going into production with early adopters Commerzbank, Credit Suisse and UBS.
鈥淐losing this strategic investment round with BNP Paribas 兔子先生Services, BNY Mellon, Citigroup and Goldman Sachs is another major step towards market adoption.鈥�
Stephan Leithner, member of the executive board of Deutsche Boerse and Clearstream chair, states: 鈥淗aving worked with HQLAx for three years now, we are excited to see the network developing and such key industry players joining as shareholders and customers.
Leithner adds: 鈥淏uilding innovative and future-proof market infrastructures in a collaborative approach is an integral part of Deutsche Boerse鈥檚 and Clearstream鈥檚 growth strategy as they are key for flexible and efficient financial markets.鈥�
Leveraging R3鈥檚 Corda Enterprise, the HQLAx platform aims to enable market participants to transfer ownership of securities seamlessly across disparate collateral pools at precise moments in time.
This allows participants to optimise their liquidity management and collateral management activities, thereby generating operational efficiency gains and capital cost savings, according to HQLAx.
Mathew McDermott, global head of digital assets at Goldman Sachs, predicts the platform will bring 鈥渕eaningful efficiencies to the securities lending and collateral management markets".
鈥淗蚕尝础x鈥檚 innovative use of DLT is a prime example of the important role transformational technologies can play in reshaping the financial system, and we are pleased to be investing in and partnering with the company,鈥� he states.
Puneet Singhvi, head of financial market infrastructures and lead for blockchain and digital assets at Citi Markets and 兔子先生Services, also describes HQLAx鈥檚 offering as 鈥渋nnovative鈥�, adding that will 鈥渄rive operational cost saving by use of DLT combined with the advantage of managing collateral pools across Citi鈥檚 global footprint鈥�.
Brian Ruane, CEO of clearance and collateral management and credit services at BNY Mellon, states that the direct connectivity between the bank and the DLT platform 鈥渃ombined with our trusted infrastructure鈥� will enable 鈥渂etter liquidity management and collateral efficiency for our clients鈥�.
Elsewhere, H茅l猫ne Virello, global head of investment and collateral services for BNP Paribas 兔子先生Services, says her firm is backing HQLAx because of a shared vision of 鈥渂ringing increased agility to today鈥檚 bespoke collateral environment鈥�.
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