LSEG Digital Securities Depository receives Gate 2 and Standard link approval, marking a step towards supporting DIGIT

Detailed summary

LSEG’s Digital Securities Depository (DSD) has received Gate 2 approval under the UK Digital Securities Sandbox to perform notary maintenance and settlement functions. LSEG’s DSD…

LSEG today announces that its Digital Securities Depository (DSD) has received approval under the UK Digital Securities Sandbox (DSS) to perform core and ancillary DSD functions.

The approval has been granted for LSEG's DSD to perform notary, maintenance and settlement functions through a Gate 2 Sandbox Approval Notice (SAN) issued under the DSS regime.

The approval also covers settlement services through a standard link1 between LSEG’s Digital Securities Depository and HSBC Bank plc’s Digital Securities Depository, HSBC Orion, for instruments including DIGIT, subject to the SFR2 designation approvals for HSBC and LSEG.

The LSEG DSD intends to offer the cash-leg settlement via LSEG's DiSH for transactions executed on the platform, including for the DIGIT pilot. Over time, LSEG's vision is to support additional cash settlement options as market demand and the regulatory landscape evolve.

SAN approval represents a significant milestone in the development of digital market infrastructure in the UK and marks an important step towards LSEG’s DSD supporting investor access for DIGIT within a regulated environment as an Investor DSD.

DIGIT will explore how distributed ledger technology can be applied across the lifecycle of the debt issuance process and aims to catalyse the development of DLT in UK financial markets.

"The approval of LSEG's Digital Securities Depository is an important milestone for both LSEG and the development of digital financial markets in the UK. By combining the capabilities of LSEG’s DSD with the cash settlement solution provided by DiSH, we are helping create the foundations for more efficient, transparent and interoperable digital capital markets. We look forward to working with the government and market participants as the pilot progresses."

1A standard link means a DSD link whereby a DSD becomes a participant in the securities settlement system of another DSD under the same terms and conditions as applicable to any other participant in the securities…

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