Tel Aviv Stock Exchange harnesses blockchain tech for new securities lending platform

There is currently no central securities lending platform in the Israeli market. Securities Lending is at present executed using inter-bank mechanisms within, and if necessary outside, banking group limits. The new platform, which will launch on November 2, will be based on Distributed Ledger Technology (DLT), commonly referred to as blockchain, and will enable direct lending among all the major financial instruments, permitting access to larger securities volumes within shorter timeframes, as well as operating in shorter-term positions.

In March 2020, TASE members were given access to an initial testing environment in the new platform in order to test lending transactions and adapt their systems in preparation for the production phase.

The Tel Aviv Stock Exchange. Photo: Courtesy

"The use of Distributed Ledger Technology (DLT) 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," read a TASE statement.

"The Tel Aviv Stock Exchange is proud to present this first-of-a-kind lending pool, a safe, cutting-edge and state of the art platform," added Orly Grinfeld, EVP and Head of Clearing at TASE. "The Blockchain technology will present a new level of safety for securities lending and will support growth for transactions based on this new platform. TASE is a global financial innovation leader, and strategically pursues the technological advancement of the capital market."