This Working Group, which DCV joined in March of this year, has been operating since August 2016, and it is also comprised of  NSD (Russian CSD), Strate (South African CSD) Six Securities Services (Swiss CSD), the Nordic affiliate of Nasdaq and SWIFT, in order to study Use Cases applicable to Securities Depositories, and to generate solutions based on Distributed Ledger Technology (DLT).

DCV's head of business projects, Claudio Calderón, explained the importance of achieving greater technological development, allowing for securities depositories to remain at the forefront, ensuring faster, safer and more efficient transactions for their clients.

..:: About the technology

It is a registration system that only permits adding information to a Distributed Database, where each participant (agents previously designated as reliable) has access to the entire database, being able to verify the records directly, without the need for an intermediary, in a secure environment where information is stored based upon the mutual agreement of participants, i.e., none of the participants can add information individually. Once a transaction is entered in this database, it cannot be altered, since it is linked with encryption mechanisms to each previous transaction record, as chained blocks, hence its name: Blockchain.

..:: The stages

The first task that this group of entities undertook was defining the product requirements for the electronic voting solution at shareholders meetings, based on DLT and shared by securities depositories operating in different markets.

The purpose of this task was in designing a real-time, reliable and traceable voting system, with tools allowing to monitor and obtain centralized reports.

Upon the incorporation of SWIFT, the group is adapting the generated document, to ensure that it is consistent with ISO 20022.

In parallel, and in order to develop transboundary DLT standards, the group is working on the interoperability of the solution.

..:: The benefits

This product seeks to provide final beneficiaries with tools allowing them to vote easily, through WEB interfaces, mobile applications, as well as to provide interfaces to interconnect with other systems, in a secure way. For Global/Local Custodians, it is aimed at permitting them to manage final beneficiaries, their voting rights, including the efficient management of the authentication test.

The solution also considers generating control panels for the issuer, the meeting manager, final beneficiaries and intermediaries, as well as enabling a centralized management of votes, agenda and results, within a distributed environment.

Claudio Calderón commented that “we pursue a highly secure, real-time processing, in line with the market standards (ISO 20022), providing transparency both regarding the Final Beneficiaries and the voting process itself.”

For DCV, belonging to this group of industry experts in the development of new post-trade solutions is a great opportunity, adopting international standards - such as DLT technology - to prevent fragmentation and subsequently enable interoperability.

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