BNP Paribas Securities Services, a wholly owned subsidiary of the BNP Paribas Group, has announced a new partnership with blockchain startup Digital Asset to design a number of real-time trade and settlement apps using DAML smart contracts.
BNP Paribas Securities Services is a global custodian and securities services provider. Backed by the strength of the BNP Paribas Group, the company provides multi-asset post-trade and asset servicing solutions for buy and sell-side market participants, corporates and issuers.
Digital Asset builds products based on distributed ledger technology (DLT) for regulated financial institutions. Its platform allows participants to share a single source of truth which provides continuous data integrity. The platform includes Digital Asset Modeling Language (DAML), a next-generation smart contract language. DAML smart contracts empower organizations to achieve more efficient business processes, reduce risk, and develop new products and services that can transform industries. DAML is an open source and platform-independent smart contract language that enables developers to write an application once and deploy it anywhere.
The two companies will work together to develop trade and settlement apps that will provide market participants in Asia Pacific with real-time access to the Australian Securities Exchange (ASX) and Hong Kong Exchange (HKEX)’s anticipated DLT-based trading and settlement platforms. The apps will also be available to clients in markets that have not integrated DLT, bringing them the benefit of real-time workflows.
According to the firms, the first solution, expected to be completed in 2021, is a smart elections service for corporate actions. Utilizing DAML smart contracts, the solution will enable all parties in the corporate action chain to receive corporate action information such as dividend reinvestment or purchase offer decisions at the same time, reducing processing time, improving operational efficiency and enabling investors to finalise their decisions on the most current information on market factors.
“As a leading provider of custody and third-party clearing solutions in Asia Pacific, BNP Paribas has an important role to play in ensuring market participants can fully capitalise on the smart contract technology that underpins the latest clearing, trading and settlement innovations,” said Luc Renard, Head of Financial Intermediaries Client Line & Digital Transformation APAC for BNP Paribas Securities Services. “We are excited to lay the foundations of our direct connectivity to the ASX’s next-generation solution and the future phase of HKEX’s platform with our first DAML-based solutions. We believe that DAML has the potential to emerge as a new standard for international capital markets. As a platform-agnostic, smart contract language, it can be used by almost any trading and settlement platform an exchange might select.”
Jon Rout, Business Development Director APAC for Digital Asset, said that their work with BNP Paribas has the potential to change the way organizations design their post-trade and custodial functions – increasing the scope for innovation and reducing risk.
“BNP Paribas Securities Services’ vision of bringing real-time post-trade information to clients and leveraging DAML smart contracts to automate client process flows at scale is an indication of just how transformative DLT will be for custody services,” Rout said.
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