Equity derivatives clearing organisation OCC has selected Axoni to help it replace its securities lending infrastructure with distributed ledger technology.
OCC’s stock loan programme was created in 1993 to clear and guarantee transactions between its clearing members, with the organisation serving as the central counterparty to lenders and borrowers.
With stock loan clearing volumes growing at a rapid rate, a move to DLT is being readied that will use AxCore, Axoni’s distributed ledger protocol, and is slated to be hosted in the cloud.
The vision of the initial roll-out is to establish a permissioned distributed ledger network for cleared stock loan transactions, governed by OCC, with the potential for peer nodes at clearing member firms that will enable participants to have a real time, accurate copy of contract and activity information, slashing manual reconciliation.
Once the baseline platform has been established, OCC and Axoni plan to go further as they seek to streamline processing.
Matt Wolfe, VP, securities finance, OCC, says: "Our work with Axoni seeks to address industry challenges and reduce costs stemming from manual processes, lack of automation, and disparate systems. The new platform lays the foundation for a future-fit CCP securities lending model."