Overview

HQLAx is a financial technology innovation firm that leverages distributed ledger technology to deliver liquidity management and collateral management solutions for institutional clients in the global securities financing markets.

The HQLAx value proposition is to improve collateral mobility across a fragmented securities settlement eco-system.

In the HQLAx operating model, there is no movement of securities between custodians. Instead, a digital collateral registry is used to record the ownership of baskets of securities, whilst the underlying securities remain in the custody location of the collateral giver.

Use-Cases

LCR Management

Collateral upgrade transactions, evergreen / extendible maturities

Intra-day 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

Why work with us

HQLAX will

  1. redistribute liquidity more effectively and more cost efficiently;
  2. reduce drag on bank earnings due to inefficient HQLA portfolio management;
  3. enhance regulatory transparency of collateral chains – full on-line and real-time visibility of DCR life- cycle through issuance, ownership chains and redemption; and
  4. mitigate systemic risk by enabling orderly default unwinds

HQLAX is independent, which provides a non-aligned leader for a consortium of competing global banks, and successfully exhibited a proof of concept platform utilizing the latest in Distributed Ledger Technology in February 2017. Distinct from an industry utility or a trade association, the business will be run with a healthy bottom line. HQLAX combines a nimble footprint of experienced traders/developers with the backing of major market participants.

Banks are facing increasing regulatory requirements for liquidity and capital, which are pressuring their earnings; there is a clear market need for a platform that can source and monetize liquidity efficiently, effectively, and transparently

HQLAx is proceeding to be open for business with a production ready platform in 2019.

HQLAx is founded by industry veterans who, from the beginning, have worked in coordination with some of the largest global banks to craft a solution. HQLAx understands that early buy-in from the market’s leading experts and biggest actors is the only way to launch a successful platform.

Learn more about the founders

Inter-operability across custodians

Transfer of ownership/pledge at precise times during the day

Reduction in intraday credit exposures

Reduction in intraday liquidity requirements

Reduction in fails

Regulatory Transparency and risk compression post-default

Scalable for future digitised assets

Operating Model

Trade Layer
Eurex Repo electronic trading market
(new segment for HQLAx collateral swaps).

Ability to enter a specific opening/closing date & time
(to the nearest minute).

 

Digital collateral record (DCR) layer
Enables atomic change of ownership of baskets of securities.

Delivery vs Delivery “DvD”.

 

Trusted Third Party (TTP) Layer
Holds baskets of securities at multiple custodians on behalf of beneficial owners.

Initiation of exposure requests to triparty agent services.

 

Custody layer (triparty agents & custodians)
Safekeeping of securities in accounts opened by the TTP.

Collateral management of securities in and out of segregated TTP accounts.

From Concept to Reality

2017

Prototype version of HQLAx platform built using Corda via a collaboration of 5 banks, R3, and HQLAx

January 2018

An Early version of the platform used to execute live transaction between 2 banks

April 2018

Deutsche Börse and HQLAx announce strategic partnership to create “4 Layer” operating model

August 2018

Deutsche Börse expands partnership with HQLAx by acquiring a minority stake

2019

Onboarding and platform launch

Latest News

Euroclear to on-board Deutsche Börse entity as collateral receiver

At the Securities Lending Technology Symposium on 9th May 2019 it was announced by Guido Stroemer that the Deutsche Börse Group

Meeting Intraday challenges with HQLAᵡ

The following piece is the summary of an Independent Study research assignment conducted by Yale School of Management MBA

Deutsche Börse and HQLAᵡ make significant progress on blockchain securities lending solution

Six banks already started onboarding Deutsche Börse acquired further shares in HQLAx