TASE sets up blockchain securities lending platform

Tel Aviv Stock Exchange Photo: Eli Yizhar

The Tel Aviv Stock Exchange is collaborating with Accenture, The Floor and Intel to establish a securities lending platform.

The Tel Aviv Stock Exchange (TASE) is embedding cutting-edge technology into its operating business, utilizing it as the technological basis of a new Securities Lending Platform - the first central securities lending platform in the Israeli market.

Securities lending is currently carried out on the capital market, mainly using inter-bank mechanisms within, and if necessary outside, banking group limits. As a result, the market has not been fully exploited to satisfy the potential needs of economic agents. The purpose of this project is to create one central platform that will transform the Securities Lending market in Israel by enabling direct lending among all the major financial instruments. The platform will function as a one-stop-shop for all securities lending activities, permitting access to larger securities volumes within shorter timeframes, even operating in shorter-term positions.

The use of Distributed Ledger Technology (DLT) (blockchain) as the basis of this new trading platform will harness some of the blockchain’s primary advantages and features, such as direct peer-to-peer transactions, Smart Contract, and enhanced security through immutability. All of these are expected to benefit TASE, its custodians and their clients by reducing costs, increasing security and enabling the market to exploit its full potential.

This will be the first project of its kind, bringing together The Floor, Accenture and Intel to develop this innovative platform for the TASE. This cooperation originated in March 2017 during an international Blockchain Hackathon and quickly became a concrete opportunity. This unique project is structured with a two phased approach comprised of an initial Proof of Concept (PoC), which upon its success will be followed by a deployment of the solution in a production environment.

The project's infrastructure is based on Hyperledger Sawtooth - an enterprise Blockchain platform for building Distributed Ledger (DLT) applications. Intel collaborated with Accenture and TASE and The Floor to deliver a private ledger on Hyperledger Sawtooth that utilizes Intel Software Guard Extensions (Intel SGX) technology to encrypt transaction data. This innovative enhancement helps keep data private among transaction participants and provides closed DLT platform members with additional confidentiality capabilities.

Accenture is leading the initiative by providing project management, systems integration, blockchain and cybersecurity consulting services to support the Securities Lending platform. The company will play a key role in the development of the platform’s Smart Contracts, one of Hyperledger Sawtooth’s main business attributes.

TASE CEO Ittai Ben-Zeev said, “The Tel Aviv Stock exchange is pleased to present this first of a kind project. A safe, cutting-edge, state of the art platform, that was created thanks to a great collaboration among The Floor, Intel and Accenture. The Blockchain technology will present a new level of safety for securities lending and will support growth for transactions based on this new platform. Without a doubt, TASE is now, more than ever before, a global financial innovation leader.”

Published by Globes [online], Israel business news - www.globes-online.com - on May 17, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Tel Aviv Stock Exchange Photo: Eli Yizhar
Tel Aviv Stock Exchange Photo: Eli Yizhar
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