ADX, Swift to support distributed ledger technology

abu dhabi — Abu Dhabi Securities Exchange (ADX) has signed a Memorandum of Understanding with the Society for Worldwide Interbank Financial Telecommunication (Swift) and seven leading global Central Securities Depository (CSD) companies to collaborate on Distributed Ledger Technology (DLT) implementation in post trade operations, as well as capital market transactions.

Today, securities processing, particularly in areas requiring multi-party contact and involving extremely cumbersome manual processes carry significant inherent cost and risk. As a part of the MoU, Swift and the CSDs have defined the product requirements for an evoting solution based on DLT that includes common standards (ISO 20022) and principles. Confirming the importance of the CSD Working Group on DLT, the International Securities Services Association (ISSA) recently endorsed the group and included it as part of a new work stream within the Association’s existing Working Group on DLT, giving this initiative greater industry visibility. As a part of ISSA, the CSD Working Group on DLT will initially focus on digital assets with a goal to establish a business framework for how these assets could be used in the post-trade space.

The framework will identify key definitions, classifications, services and post trade service provider roles. Findings from the use case on digital assets are expected to be published in Q2 of 2018.

Rashed Al Blooshi, Chief Executive of ADX, said: “As the first market in the Mena region to enter into an agreement of this kind, this signing marks another significant achievement for ADX. The exchange will open channels of constructive dialogue with various stakeholders to identify the common principals, standards and business rules needed for the successful implementation of DLT in post trade operations, with the aim of enhancing the speed and security of capital market transactions.”