The Central Securities Depository in Prague (CSD Prague), a subsidiary of the Prague Stock Exchange and part of the Vienna-Prague Stock Exchange Group, has become the first institution globally to receive authorization under the EU’s DLT pilot regime to operate a distributed ledger technology (DLT) market infrastructure.
This landmark approval, granted by the Czech National Bank and confirmed by the European Securities and Markets Authority (ESMA), enables CSD Prague to offer a DLT-based register for securities from November 18, 2024.
Christoph Boschan, CEO of the Vienna Stock Exchange, said in a statement: “DLT, often linked with blockchain and cryptocurrencies, offers a significant opportunity to enhance efficiency and transparency in securities settlement. As an infrastructure provider, we are excited to be at the forefront of innovation in the capital markets.”
DLT allows for seamless securities management, including the transfer of shares or bonds for initial subscriptions, capital increases, or transfers between accounts based on agreements with counterparties. By eliminating intermediaries and reducing administrative complexities, DLT settlement simplifies the booking process while maintaining the security and transparency of traditional central registers. Private investors will benefit from a streamlined process using the “BankID” electronic identification solution, offering 24/7 account access via web or mobile applications.
Petr Koblic, CEO of the Prague Stock Exchange and member of the Board of the Vienna Stock Exchange, said in a statement: “With CSD Prague’s integrated post-trading processes and our IT team’s 20 years of securities business expertise, we were able to swiftly develop the DLT system to meet market needs.”
Financial service providers can also join the DLT system as nodes, enabling them to open DLT accounts for clients and record transfers within their customer applications. The technology offers significant benefits to FinTech companies, crowdfunding platforms, and companies with employee participation programs, providing additional services and alternative financing options without intermediaries.