Axoni announced that BlackRock has begun using Veris, Axoni’s distributed ledger network for equity swaps, joining Citi, Goldman Sachs, and other counterparties. BlackRock is using Axoni’s software through an integration with the firm’s Aladdin operating system. BlackRock Investment Operations will use Axoni’s software internally, with the goal of making the capabilities available to Aladdin clients following further integration and development.
Veris uses the ISDA Common Domain Model (CDM), an open-source, standardized model for derivative trade processing, to bring consistency to how firms represent derivative events and products in order to reduce costs and risks associated with inconsistencies in trade processing.
The Axoni platform allows for all parties on a trade to match and confirm all trade terms upfront and remain synchronized on post-trade events such as amendments, positions, and cash flows through the lifecycle of the swap.
This milestone comes after years of engagement between BlackRock, Axoni, and other large financial institutions in evaluating the use of a distributed ledger network for the post-trade management of derivatives, beginning with equity swaps. While the market for equity swaps has grown rapidly in recent years, the industry has encountered operational complexities in keeping up with trade volumes. Axoni’s distributed ledger network addresses these challenges by managing the end-to-end lifecycle for equity swaps.
Carl Forsberg, head of OTC Markets at Axoni, said in a statement: “Sell-side participants will benefit immensely from using a shared platform with one of the industry’s most important swap counterparties. BlackRock will bring significant efficiencies to the network by driving adoption of standardized post-trade swap data models and workflows.”
Mark Cox, COO of Global Investment Operations at BlackRock, said in a statement: “The Axoni platform will help us build scalability while mitigating risks in the investment life cycle beginning with equity swaps. We see great potential in a distributed ledger network for uncleared derivatives as we continue to prove out this new area of innovation.”
Brian Steele, global head of Market Solutions at Goldman Sachs, said in a statement: “BlackRock joining the Axoni network represents an important step in the evolution of market infrastructure and is a direct result of the strategic partnership between our firms. We look forward to continuing these efforts with new and existing network members, working together to digitally standardize trade events and re-architect the derivatives post-trade ecosystem, while leveraging our open source data management platform Legend to create more transparent standards for data governance.”