Innovative technologies in securities post-trading

11 January 2019

How can new technologies address market and regulatory needs in the area of securities post-trading? A fintech task force established by the Harmonisation Steering Group has looked into this issue and presented potential use cases in a newly published report.

The report proposes a high-level conceptual framework for four use cases:

• shareholder identification and transparency
• transmission of information on corporate actions
• electronic voting
• withholding tax procedures

Recent EU regulatory initiatives, such as the Shareholder Rights Directive II and the Code of Conduct on Withholding Tax, will impact a number of post-trade processes. The report suggests that innovative technologies can make it possible to achieve regulatory compliance at industry level. Distributed ledger technology (DLT) is attractive for supporting use cases that require standardised information to be shared among different entities in the same securities chain. However, some issues related to governance and interoperability still need to be addressed.