SIX Swiss Exchange to apply DLT tech from Nasdaq in structured products line
09 August 2017 | 12603 views | 0
SIX Swiss Exchange is to investigate the prospect of using distributed ledger technology in its over-the-counter structured product business as part of its long-standing trading technology contract with Nasdaq.
Nasdaq had been investing heavily in blockchain technology through stakes in Chain.com and French startup Stratumn. The agreement with SIX sees the New York exchange extend the Chain products integrated into its technology stack to third party exchange clients.
In October last year, the two exchange's extended their current ten-year technology contract, which includes trading technology for SIX equities, ETFs, structured products, funds and fixed income markets, as well as Smarts Market Surveillance and Nasdaq Pre-Trade Risk Management.
For the DLT element, SIX will apply the Nasdaq framework to a Minimum Viable Product in its structured product business, giving it first-hand experience of the potential benefits of the technology in the post-trade environment.
Lars Ottersgård, EVP and head of market technology, Nasdaq, says: "This project with SIX Swiss Exchange, one of our long-term partners, is a prime opportunity to explore and implement blockchain technology in a controlled, highly collaborative environment."
The agreement opens up a new front in Nasdaq's technology trading business, which provides a range of systems to over 100 marketplaces, regulators, clearing houses and central securities depositories across the Americas, Europe, Asia, Australia, Africa, the Middle East and the Caribbean.
The SIX Group has already conducted a number of experiments in the blockchain sphere. SIX Securities Services, for instance, has developed a distributed ledger-based bond issuing prototype through a partnership with Digital Asset Holdings.
It's also aware of the roadblocks to large-scale adoption, issuing a report in October last year which suggested that regulatory uncertainty and a lack of inhouse expertise are proving major hurdles to near-term adoption, forecasting a six-year timeframe before industry-wide applications of the technology would see the light of day.