Axoni, a tech firm specializing in distributed systems within capital markets, announced today that a working group of fifteen leading sell-side and buy-side firms in the equity swaps market; have successfully launched a distributed ledger network to manage equity swap transactions.
The milestone was marked by the first live trade data processed between Citi and Goldman Sachs on the network built on AxCore, Axoni’s distributed ledger software.
A multi-year effort led by Axoni and bolstered by substantial cooperative efforts from the working group has now resulted in a distributed infrastructure that enables both sides of an equity swap to be synchronized throughout their lifecycle, communicating changes to each other in real-time.
Growing demand for equity swaps has led to substantially more data and value relying on legacy processes and infrastructure. Most equity swaps are executed directly between counterparties. Each counterparty maintains their own books and records to represent the initial trade terms and track any changes through the lifecycle of the trade where active volumes can number in the millions per firm. Data breaks between counterparties are frequent, leading to substantial operational costs from manually reconciling records against one another.
“Axoni is thrilled to see this network coming alive and being used in production by our partners. The level of collaboration across firms on this initiative to drive feature roadmaps and standards has been impressive, the outcome of which is poised to have a substantial impact on post-trade processing across the industry.”
– Carl Forsberg, Head of OTC Markets at Axoni
As part of the initiative; the participating firms also collaborated to create and implement a standardized representation of equity swaps throughout their lifecycle. This includes initial trade confirmation, cash flows, amendments, and corporate actions.
