Monday, 27 May 2019

Tel Aviv Stock Exchange plans blockchain securities lending platform

The Tel Aviv Stock Exchange (TASE), Accenture and innovation centre The Floor plan to unveil a new blockchain securities lending platform powered by Intel.

According to TASE, there is currently no central securities lending platform in the Israeli market. Securities lending is at present executed in the capital market, primarily using inter-bank mechanisms within, and if necessary outside, banking group limits.

As a result, the market has “not been fully exploited to satisfy the potential needs of economic agents”.

Jacob Benadiba, Accenture’s country MD for Israel, says: “Blockchain technology is poised to bring sweeping innovation to the global capital markets infrastructure, and this project shows how rapidly this technology is taking hold around the world.”

The purpose of their project is to create one central platform for the securities lending market in Israel by enabling direct lending among financial instruments.

The platform will function as a “one-stop-shop” and so “permitting access to larger securities volumes within shorter timeframes, even operating in shorter-term positions”.

Their cooperation originated in March 2017 during an international blockchain hackathon and “quickly transitioned to a concrete opportunity”.

This project has a two-phased approach comprised of an initial proof of concept (PoC), which will be followed by a deployment of the solution in a production environment.

Hyperledger Sawtooth is the infrastructure – an enterprise blockchain platform for building distributed ledger applications.

Intel offers a private ledger on Hyperledger Sawtooth that uses Intel’s Software Guard Extensions technology to encrypt transaction data.

Accenture is leading the initiative by providing project management, systems integration, blockchain and cybersecurity consulting services to support the platform. The company will play a “key role” in the development of the platform’s smart contracts.

TASE was founded in September 1953. The TASE group, which consists of the stock exchange, the Nominee Company, the TASE Clearing House and the Derivatives Clearing House, provides local and international investors with trading and clearing in securities, including stocks, corporate bonds, government bonds, index-tracking products and derivatives.

TASE is home to over 450 listed companies, with a total market value of approximately $200 billion, 688 corporate bonds and 709 ETFs.

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