Enterprise blockchain vendor Axoni and a group of 15 sell-side and buy-side firms have launched a distributed ledger network to manage equity swap transactions.
The first live trade data was processed between Citi and Goldman Sachs on the network, built on Axoni's AxCore distributed ledger software.
The launch comes after several years of work to find an alternative to legacy processes and infrastructure sagging under the weight of the growing demand for equity swaps and the resultant increase in data.
Most equity swaps are executed directly between counterparties, with each maintaining their own books and records to represent the initial trade terms and track any changes through the lifecycle of the trade, where active volumes can number in the millions per firm.
Data breaks between counterparties are frequent, leading to substantial operational costs from manually reconciling records against one another.
The new distributed infrastructure enables both sides of an equity swap to be synchronized throughout their lifecycle, communicating changes to each other in real time.
Puneet Singhvi, head, financial market infrastructure and lead for blockchain, DLT and digital assets, Citi, says: “The platform, using smart contracts, will enable significant efficiencies while mitigating risks in post trade processing of equity swaps.”