Swift recruits CSDs for DLT post trade plans

Swift recruits CSDs for DLT post trade plans

Banking cooperative Swift has signed an MoU with seven central securities depositaries (CSDs) to explore how distributed ledger technology (DLT) can be used to improve post-trade processes such as corporate actions, proxy voting and trade processing.

In addition to designing new DLT-based products, the group, known as the CSD Working Group on DLT, will also explore the feasibility of using existing standards such as as ISO 20022 to support any DLT initiatives.

The consortium of seven CSDs comprise Abu Dhabi Securities Exchange, Caja de Valores, Depósito Central de Valores, Nasdaq Market Technology AB, National Settlement Depository, SIX Securities Services and Strate Ltd and Swift hopes to recruit more CSDs in the coming weeks. 

Finding a way to keep the ISO messagung standards relevant in a DLT-based post trade world is a priority for Swift said its head of standards Stephen Lindsay. "To ensure interoperability and smooth migration, it is crucial that new technologies support existing common standards such as ISO 20022. The promise of technology on paper is great but it is currently missing a key component around standardisation."

Lindsay says that this latest project will aim to show the benefit of "resuing established business definitions" among new DLT implementations.

The group will also explore the creation of new standards as well promoting DLT research within the CSD community. 

While various consortiums have formed in recent months to explore the potential of DLT within the industry, the CSD Working Group's focus on standards has been endorsed by other international trade bodies including the International Securities Services Association.

Its chairman, Six Securities CEO Thomas Zeeb, welcomed the group's ambition to address the key challenge for emerging technologies that is the "clear lack of standards" .


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