Chairman Sir David Walker is a former Executive Director of the Bank of England, and also a former Chairman of Barclays, Morgan Stanley International and one of the U.K.’s Securities and Investments Board financial regulators. Recently joining the board are former Deputy Governor of the Bank of England Rachel Lomax and Ed Richard, former CEO of Ofcom, the U.K. telecommunications and media regulator.
While Randall puts much emphasis on the level of “engagement” that SETL’s business-oriented team can direct toward opportunities, as well as the company’s understanding of regulatory regimes, the company’s OpenCSD platform has been built – after an extensive search of existing alternatives – to meet the functional and performance demands of the financial marketplace.
Randall says that a financial markets blockchain platform needs to possess the following capabilities:
- It must be able to process transaction peaks of over 10,000 per second.
- It must be able to sustain a high throughput of transactions in excess of one billion per day.
- It needs to have participant identity functionality built in across all of its functions, in order to support regulatory requirements, such as Anti-Money Laundering and Know Your Customer.
- It needs to be able to operate with real-world assets, such as fiat currencies and existing securities and financial instruments.
- It needs to be able to interoperate across borders with other blockchains, because the regulatory regimes of different countries will require separate blockchains.
SETL has applied what Randall describes as “very detailed engineering” in developing OpenCSD to meet his stated requirements, which for the most part is proprietary, relying on minimal licensed technology. As for deployment, Randall says that SETL is open to different models, whether it be a traditional inhouse approach or an “as-a-service” cloud model.
The “Open” part of the OpenCSD name refers to the broad uses to which its distributed ledger might be applied. Randall suggests that existing securities depositories might be customers, as well as other financial institutions who want to set up securities depository functions, for markets ranging from private equity to foreign exchange.
In a recent statement, Bank of England Governor Mark Carney said that the central bank planned to make its financing available to new (regulated) fintech players in the wholesale securities settlements and payments space in order to “enable innovation and competition, without compromising stability.” This move, Randall says, will encourage new players to enter the settlements marketplace, and so he is expecting significant demand for OpenCSD.
For now, Randall says that SETL is working on projects across six continents, though he declines to identify any partners, with the exception of Computershare in Australia. Computershare is working with SETL on a securities registry, initially for its local market but which could be rolled out internationally.
For the project, Computershare is bringing together “issuers, asset owners, brokers, regulators and market infrastructure providers” while SETL will provide the “finance-grade solution.”
Image Guilhem Vellut