Accelerating collateral mobility
Reduction in intraday liquidity requirements
Scalable for future digitised assets
Reduction in fails
Regulatory transparency and risk compression post-default
Reduction in intraday credit exposures
Inter-operability across custodians
Transfer of ownership/pledge at precise times during the day
HQLAᵡ is an innovative financial technology firm founded by financial market practitioners.  Our vision is to accelerate the financial ecosystem’s transition towards frictionless ownership transfers of assets, and our core clients are financial institutions active in securities lending and collateral management.
Our immediate goal is to improve collateral mobility amongst market-leading triparty agents and custodians. Together with Deutsche Börse, we created a multi-layer operating model which enables our clients to exchange ownership of baskets of securities across disparate collateral pools at precise moments in time.  
The atomic nature of our Delivery vs Delivery (DvD) ownership transfers provides our clients with capital cost savings by reducing credit risk, intraday liquidity requirements, and operational risk.

Use-Cases

LCR Management
Collateral upgrade transactions, evergreen / extendible maturities
Intraday Liquidity Management
Transfer of ownership of baskets of securities intraday DvD
Margin Pledge
Pledge baskets of securities real-time
Funding
Mobilise hard-to-move assets

Benefits

Transfer of ownership/pledge at precise times during the day
Regulatory transparency and risk compression post-default
Reduction in intraday liquidity requirements
Reduction in intraday credit exposures
Scalable for future digitised assets
Inter-operability across custodians
Reduction in fails

HQLAᵡ enables market participants to transfer ownership of securities seamlessly across disparate collateral pools at precise moments in time. This allows our clients to optimize their liquidity management and collateral management activities, thereby generating operational efficiency gains and capital cost savings.

Today

  • The current collateral upgrade market relies on collateral to be managed across a fragmented custody network.
  • Settlement of transactions occurs at unspecified times during settlement windows
  • Current market practice is to settle collateral upgrade transactions either by:
    • Two Free of Payment (FoP) deliveries, or
    • Two Delivery versus Payment (DvP) settlements
  • Both settlement practices consume costly bank capital. The former consumes intraday credit due to timing and mismatches of unsynchronised (FoP) deliveries, and the latter consumes intraday liquidity due to the cash payment legs of (DvP) settlements.

Tomorrow

  • HQLAᵡ uses new technology in an innovative way to enhance collateral mobility across the existing custodian/triparty landscape.
  • The HQLAᵡ operating model leverages distributed ledger technology to enable atomic Delivery verses Delivery (DvD) for baskets of securities residing at multiple custodians.
  • DvD reduces consumption of intraday credit and intraday liquidity, thereby providing capital savings.
  • Not only a date but also a time is specified for the start leg and end leg of a transaction.
  • HQLAᵡ could ultimately be used to enhance regulatory transparency over collateral chains, and potentially facilitate risk compression solutions for post default scenarios.
  • Initial roll-out in Europe, longer term strategy is to expand to APAC and US.

Latest news

Building Pipes
January 19, 2021

HQLAᵡ is now backed by some of the biggest names on Wall Street. COO Nick Short lays out why connectivity is the key to success and what’s next for the DLT platform provider.

HQLAᵡ Secures EUR 14.4m Series B Funding from BNY Mellon, Goldman Sachs, BNP Paribas Securities Services, Citigroup and Existing Shareholder Deutsche Börse
January 11, 2021

BNY Mellon, BNP Paribas Securities Services, Citigroup and Goldman Sachs will connect to the HQLAᵡ platform in 2021 to accelerate collateral mobility for their clients across the securities finance ecosystem.

SEARCHING FOR THE TOOLBOX - INNOVATION IN CAPITAL MARKETS
December 9, 2020

Complex front-, middle-, and back-office challenges within firms operating in the capital markets has led many in search of new technologies to ease burdens. These FinTech solutions often emerge in the form of technological advances such as Artificial Intelligence (AI), Robotic Process Automation (RPA), Distributed Ledger Technologies (DLT), Cloud Technologies, and a host of other acronyms, that assist in bringing innovation to value chains.

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