New DTCC White Paper Calls for Leveraging Distributed Ledger Technology to Solve Certain Long-Standing Operational Challenges

New York, London, Hong Kong and Singapore (ots/PRNewswire) -

White paper calls for industry-wide engagement and collaborative
rearchitecture of core processes to avoid siloed solutions based on
different standards

The Depository Trust & Clearing Corporation (DTCC
(http://www.dtcc.com)), the premier post-trade market infrastructure
for the global financial services industry, today issued a white
paper (http://www.dtcc.com/~/media/Files/PDFs/DTCC-Embracing-Disrupti
on.pdf) that calls for industry-wide collaboration in leveraging
distributed ledger technologies to modernize, streamline and simplify
the siloed design of the financial industry infrastructure and
address certain limitations of the current post-trade process.

"The industry has a once-in-a-generation opportunity to reimagine
and modernize its infrastructure to resolve long-standing operational
challenges," said Michael Bodson, President and CEO at DTCC. "To
realize the potential of distributed ledger technology in a
responsible manner and to avoid a disconnected maze of siloed
solutions, the industry must work together in a coordinated fashion."

The paper, titled "Embracing Disruption - Tapping the Potential of
Distributed Ledgers to Improve the Post-Trade Landscape (http://www.d
tcc.com/~/media/Files/PDFs/DTCC-Embracing-Disruption.pdf)," notes
that while today's financial market infrastructures have a proven
track record of providing stability, reliability and certainty, they
are often quite complex, siloed and not equipped for 24/7/365
processing. DTCC believes a secure distributed ledger, with complete
and traceable transaction history for a set of assets that is shared
and accessible only between trusted parties, could provide
significant operational improvements as well as further mitigate risk
and reduce post-trade costs.

Based on its research and analysis, DTCC recommends exploring
targeted opportunities to improve upon the existing infrastructure in
certain defined areas where automation is limited or non-existent and
where the technology provides a clear benefit over existing
processes. Opportunities to explore include: master data management;
asset/securities issuance and servicing; confirmed asset trades;
trade/contract validation, recording and matching for the more
complex asset types that currently do not have strong existent
solutions; netting and clearing; collateral management; and, longer
term, settlement.

However, the white paper cautions that distributed ledger
technology is still immature and unproven, has inherent scale
limitations in its current form, and lacks underlying infrastructure
to cleanly integrate the technology into the existing financial
market environment. As a result, it may not be the solution to every
problem and alternative solutions should also be considered in
evaluating opportunities to lower the costs and risks of current
infrastructure through standardized industry workflows and expanded
use of cloud technologies.

Industry-Wide Coordination and Collaboration

The paper also notes that research efforts thus far have been
generally uncoordinated and, as a result, the industry is at risk of
repeating the past and creating countless new siloed solutions based
on different standards and with significant reconciliation
challenges. The most logical way forward is for the existing,
regulated and trusted central authorities to help play a leading role
in introducing the standards, governance and technology to support
distributed ledger implementations. Furthermore, we believe these
organizations, working in partnership with a wide range of the
industry, can help ensure that new opportunities are in the best
interests of post-trade processing and consistent with long-standing
goals of mitigating risk, enhancing efficiencies and driving cost
efficiencies for market participants.

"The current approach of many firms experimenting in private with
a technology that uses consensus protocols to provide transparency
could lead to a new post-trade environment with the same integration
and reconciliation problems that companies face today," Bodson said.
"As an industry-owned and governed financial market utility with more
than 40 years of service, DTCC is uniquely positioned to help lead
the effort in exploring how distributed ledger technology can
simplify or replace legacy post-trade systems."

As part of its commitment to progressing distributed ledger
technology in the post-trade space, DTCC recently made a financial
investment in Digital Asset Holdings, LLC (http://digitalasset.com/),
a developer of distributed ledger technology for the financial
services industry, and Bodson will sit on the company's Board of
Directors. This investment positions DTCC to play a leading role in
fostering industry-wide collaboration and helping to introduce the
standards, governance and technology to support distributed ledger
implementations.

DTCC has also joined the Linux Foundation
(http://www.linuxfoundation.org/), a nonprofit organization enabling
mass innovation through open source, to support a new venture known
as the Hyperledger project, a collaborative effort to advance the
Blockchain technology. This relationship will enable DTCC to play a
leading role in creating the governance and standards for the
technology and ensure it is open source and based on collaboration.

For more information on distributed ledger technology and updates
on DTCC's progress with this emerging technology, go to
http://www.dtcc.com/blockchain.

About DTCC

With over 40 years of experience, DTCC is the premier post-trade
market infrastructure for the global financial services industry.
From operating facilities, data centers and offices in 16 countries,
DTCC, through its subsidiaries, automates, centralizes, and
standardizes the post-trade processing of financial transactions,
mitigating risk, increasing transparency and driving efficiency for
thousands of broker/dealers, custodian banks and asset managers
worldwide. User owned and industry governed, the firm simplifies the
complexities of clearing, settlement, asset servicing, data
management and information services across asset classes, bringing
increased security and soundness to the financial markets. In 2014,
DTCC's subsidiaries processed securities transactions valued at
approximately US$1.6 quadrillion. Its depository provides custody and
asset servicing for securities issues from over 130 countries and
territories valued at US$64 trillion. DTCC's global trade repository
maintains approximately 40 million open OTC positions and processes
roughly 280 million messages a week. To learn more, please visit
http://www.dtcc.com or follow us on Twitter @The_DTCC
(https://twitter.com/the_dtcc).

Contacts: Amanda Richter, DTCC +1-813-470-1654 arichter@dtcc.com
Emma Cullen-Ward, One Profile +61-2-8915-9900
emma@oneprofile.com.au Sherman Ko, Ryan Communication
+852-6101-0487 sherman@ryancommunication.com Melissa Rowling,
Greentarget +44-(0)20-7324-5490 melissa.rowling@greentarget.co.uk
Audra Tiner, Articulate Comms +1-212-255-0080
atiner@articulatecomms.com

ots Originaltext: The Depository Trust & Clearing Corporation (DTCC)
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