BNY Mellon and Goldman Sachs Settle First HQLAx Agency Securities Lending Transactions

Rhea-AI Summary

BNY Mellon and Goldman Sachs International have completed the industry's first agency securities lending transactions using the HQLA^X Distributed Ledger Technology (DLT) platform. These 35-day term transactions involve hundreds of millions of US dollars, creating Digital Collateral Records (DCRs) that represent specific ISIN quantities. This innovation streamlines the ownership transfer of securities and enhances liquidity management in the collateral upgrade market, paving the way for increased scalable volumes. Both companies express excitement about the future of DLT in traditional finance.

Positive

• Completion of the first DLT-based agency securities lending transactions, setting a new industry milestone.
• Creation of Digital Collateral Records (DCRs) promotes efficient ownership transfer and enhances liquidity.
• Partnership strengthens BNY Mellon's role as a liquidity provider, potentially increasing market volumes.

Negative

• None.

LONDON, July 20, 2022 /PRNewswire/ -- BNY Mellon and Goldman Sachs International ("Goldman Sachs") have successfully completed the industry's first agency securities lending transactions using the HQLA^X Distributed Ledger Technology (DLT) platform.

As part of the combined series of 35-day term transactions with a total size in the hundreds of millions of US dollars, HQLA^X created ISIN-level securities trackers called Digital Collateral Records (DCRs) from loaned securities it received from BNY Mellon, giving Goldman Sachs a digital copy of those trades. 

The ISIN-level DCRs are the first of their kind, representing specific ISIN quantities held in custody. Those records will enable holders and agents to transfer ownership of any security on the HQLA^X distributed ledger, without the need for conventional settlement mechanisms. 

It also paves the way for eligible clients to reuse ISIN-level DCRs in onward collateral obligations at one or more Triparty Agents.

"We are delighted to be partnering with HQLA^X on this milestone. The potential to enhance collateral and inventory mobility is very exciting and something that has been a key industry focus for a number of years," said Bill Kelly, Head of Securities Finance at BNY Mellon.

"This represents another key step in our adoption of DLT to facilitate traditional financial activity in order to unlock efficiency gains across market participants. We are looking forward to growing volumes with our counterparts over the coming months," said Amar Amlani, Head of EMEA Digital Assets at Goldman Sachs.

"Agency securities lending activity represents the single biggest source of liquidity for the collateral upgrade market, so welcoming BNY Mellon as a liquidity provider to our platform represents a tipping point for recurring, scalable volumes on our platform," commented Guido Stroemer, co-founder and CEO of HQLA^X. "We are very proud to collaborate closely with strategic partners like Goldman Sachs and BNY Mellon to develop and implement innovative industry solutions like this one."

About BNY Mellon
BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment and wealth management and investment services in 35 countries. As of June 30, 2022, BNY Mellon had $43.0 trillion in assets under custody and/or administration, and $1.9 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for the latest company news.

About Goldman Sachs
Goldman Sachs is a leading global financial institution that delivers a broad range of financial services across investment banking, securities, investment management and consumer banking to a large and diversified client base that includes corporations, financial institutions, governments and individuals. Founded in 1869, the firm is headquartered in New York and maintains offices in all major financial centers around the world.

About HQLA^X
HQLA^X is a financial technology innovation firm that specialises in delivering liquidity management and collateral management solutions for institutional clients in the global securities lending and repo markets. www.hqla-x.com

Contacts:     

BNY Mellon           
Nina Truman    
nina.truman@bnymellon.com
+1 212 815 2006   

Goldman Sachs
Sebastian Howell
sebastian.howell@gs.com  
+ 44 (20) 7552 5821 

HQLA^X
Elisa Poutanen
elisa.poutanen@hqla-x.com
+352 621 562 920 

View original content:https://www.prnewswire.com/news-releases/bny-mellon-and-goldman-sachs-settle-first-hqlax-agency-securities-lending-transactions-301589545.html

SOURCE BNY Mellon

FAQ

What is the significance of the agency securities lending transactions by BK on July 20, 2022?

The transactions represent the first successful use of HQLA^X DLT platform in agency securities lending, enhancing efficiency and liquidity.

How does the HQLA^X DLT platform improve securities lending for BK?

It enables the creation of Digital Collateral Records (DCRs), facilitating seamless ownership transfer of securities.

What was the total size of the agency securities lending transactions involving BK and Goldman Sachs?

The transactions involved hundreds of millions of US dollars.

What role does BNY Mellon play in the DLT transactions involving BK?

BNY Mellon acts as a liquidity provider, enhancing the scalability of the agency securities lending market.