Broadridge Financial Solutions Inc., a provider of tradeprocessing technology, says it's bringing blockchain to therepurchase-agreement market.

In a recent pilot with Societe Generale and Natixis, the firmsaid it found that distributed-ledger technology can make repotrades more efficient and less risky by providing a secure recordof transaction details. Under a repo agreement, one party offers asecurity as collateral for a cash loan. Securities dealers userepos to finance holdings and increase leverage.

“This new blockchain-enabled solution, which automatesend-to-end processes, streamlines the repo agreement andconfirmation processes, offers a faster and more accuratecollateral substitution process, while eliminating time consumingmanual interventions, and reduces counterparty risk whileincreasing auditability,”' Broadridge said in a statement.

Broadridge is one of many financial institutions that haverecently experimented with blockchain, the technology behindbitcoin that is used for verifying and recording transactions.JPMorgan Chase & Co. said Monday that it's testing how it canuse blockchain to improve global payments. Earlier this year, thebanking giant worked with Broadridge on a blockchain pilot thatexplored how the technology can make proxy voting more transparent.Broadridge is the biggest U.S. provider of proxy-votingservices.

“We don't envision this just stopping on one type of trade likethe bilateral repo,” Horacio Barakat, vice president of corporatestrategy at Broadridge, said in a phone call Monday. “We envisionthis as the first step in the road map toward collateralmanagement.”

From: Bloomberg News

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