PASLA: ASX post-trade system update to benefit sec lending
06 March 2019 Sydney
Image: Shutterstock
The Australia Securities Exchange (ASX) replacement of its post-trade systems will mean that receiving the settlement of a trade will be a lot quicker for the securities lending industry, according to one panellist at the PASLA/RMA conference in a panel on regional market updates for offshore participants.
ASX announced last year that it would be replacing its current post-trade system with distributed ledger technology. Another panellist suggested that this move would 鈥渁llow for greater innovation and a much easier way to implement change鈥�.
The panellist explained: 鈥淚n doing this, it brings a test to the market. We are not looking for a like-for-like replacement and we are not demanding the market move to move to DLT, there will be a message-based way to communicate with systems as well as a direct way to communicate, which would allow you to get all of the benefits of the DLT solution.鈥�
Additionally, the speaker said ASX is also adding an auto-borrow functionality, which is one of many functionalities that we will be added to the new platform when it goes live in April 2021.
The auto borrow capability will allow for cheaper access for borrowing in the market. The speaker said that ASX is laying down the technology in order to make that happen.
The moderator noted that collateral is space where you can really benefit in moving securities around.
He asked: 鈥淒o you get a sense that because of where Australia is located geographically, you need to be able to use this technology to make it more efficient to get the settlement done in time due to it having such a big time difference to the rest of the world?鈥�
To this, the panellist said: 鈥淲ith the integrity that ASX has in the market means that we don鈥檛 have a trust issue.鈥�
鈥淚n fact, what we have is how do you leverage shared data in a mutualised workflow and being wherever you are geographically, even on the T+S settlement cycle, settling in the middle of the day and when you are leaving a client instructions from overseas then the client instructions could be on shared data and cut down on timings.鈥�
ASX announced last year that it would be replacing its current post-trade system with distributed ledger technology. Another panellist suggested that this move would 鈥渁llow for greater innovation and a much easier way to implement change鈥�.
The panellist explained: 鈥淚n doing this, it brings a test to the market. We are not looking for a like-for-like replacement and we are not demanding the market move to move to DLT, there will be a message-based way to communicate with systems as well as a direct way to communicate, which would allow you to get all of the benefits of the DLT solution.鈥�
Additionally, the speaker said ASX is also adding an auto-borrow functionality, which is one of many functionalities that we will be added to the new platform when it goes live in April 2021.
The auto borrow capability will allow for cheaper access for borrowing in the market. The speaker said that ASX is laying down the technology in order to make that happen.
The moderator noted that collateral is space where you can really benefit in moving securities around.
He asked: 鈥淒o you get a sense that because of where Australia is located geographically, you need to be able to use this technology to make it more efficient to get the settlement done in time due to it having such a big time difference to the rest of the world?鈥�
To this, the panellist said: 鈥淲ith the integrity that ASX has in the market means that we don鈥檛 have a trust issue.鈥�
鈥淚n fact, what we have is how do you leverage shared data in a mutualised workflow and being wherever you are geographically, even on the T+S settlement cycle, settling in the middle of the day and when you are leaving a client instructions from overseas then the client instructions could be on shared data and cut down on timings.鈥�
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