DTCC’s Project Ion advances into development phase
15 September 2021 US
Image: Michele Hillery
The Depository Trust & Clearing Corporation’s (DTCC) Project Ion initiative is set to move into a development phase following a successful prototype pilot with market participant firms.
Project Ion is an alternative settlement platform that leverages distributed ledger technology (DLT). It is specifically modelled around a netted T+0 settlement cycle, but it is also capable of supporting T+2, T+1, T+0 or extended settlement cycles.
The platform is designed to provide a clearance and settlement option for the industry leveraging DTCC’s core benefits of risk management and volume capacity, including netting and the trade guarantee of the central counterparty (CCP).
As well as this, it has been designed to support new features with interoperability between the Project Ion platform and the classic settlement platforms at The Depository Trust Company (DTC), and to ensure adherence to DTCC’s regulatory standards across resiliency, stability, security, risk, and controls.
Project Ion’s functionality will be introduced in phases. The first phase of the Project Ion platform will support bilateral deliver order transactions that will be initiated by pilot participants through client nodes hosted by DTCC.
Once launched, the transactions will be processed through the Project Ion platform and then passed to DTC’s existing systems for settlement processing, DTCC explains.
Future phases of Project Ion are expected to extend the platform’s functionality over time to realise the reconciliation efficiencies offered by DLT. Other phases are anticipated to include the provision of access through a client-hosted node and expanding the transaction types processed by the platform.
Meanwhile, DTCC has planned for early and later adoption of the functionality and technology offered by Project Ion, to ensure the phased roll-out is responsive to clients’ individual development agendas.
For clients, this means that while the general industry can move ahead to achieve T+1 accelerated settlement on DTCC’s classic systems, those clients ready to integrate onto the ledger can begin development efforts and start to ready their firms for the future operating model without waiting for full-market adoption.
According to Michele Hillery, general manager of equity clearing and DTC settlement service at DTCC, the industry’s primary goal must be to create efficiencies without introducing additional risk to markets, and client participation and feedback at every iterative step of this journey will be pivotal to the continued success of the platform.
Hillery says: “Project Ion holds the promise of new settlement functionality supported by robust technical capabilities and is a key part of our on-going efforts to further accelerate settlement and build upon current same-day settlement capabilities.”
Murray Pozmanter, head of clearing agency services and global business operations at DTCC, comments: “Project Ion has demonstrated that settlement in a T+1 or T+0 environment are effective use cases for DLT, and we look forward to working with our clients and the industry to launch the new platform.”
In April, DTCC collaborated with the Securities Industry and Financial Markets Association, and the Investment Company Institute to accelerate the move of the US securities settlement cycle to T+1.
To read more about the industry’s settlement structure, click here.
Project Ion is an alternative settlement platform that leverages distributed ledger technology (DLT). It is specifically modelled around a netted T+0 settlement cycle, but it is also capable of supporting T+2, T+1, T+0 or extended settlement cycles.
The platform is designed to provide a clearance and settlement option for the industry leveraging DTCC’s core benefits of risk management and volume capacity, including netting and the trade guarantee of the central counterparty (CCP).
As well as this, it has been designed to support new features with interoperability between the Project Ion platform and the classic settlement platforms at The Depository Trust Company (DTC), and to ensure adherence to DTCC’s regulatory standards across resiliency, stability, security, risk, and controls.
Project Ion’s functionality will be introduced in phases. The first phase of the Project Ion platform will support bilateral deliver order transactions that will be initiated by pilot participants through client nodes hosted by DTCC.
Once launched, the transactions will be processed through the Project Ion platform and then passed to DTC’s existing systems for settlement processing, DTCC explains.
Future phases of Project Ion are expected to extend the platform’s functionality over time to realise the reconciliation efficiencies offered by DLT. Other phases are anticipated to include the provision of access through a client-hosted node and expanding the transaction types processed by the platform.
Meanwhile, DTCC has planned for early and later adoption of the functionality and technology offered by Project Ion, to ensure the phased roll-out is responsive to clients’ individual development agendas.
For clients, this means that while the general industry can move ahead to achieve T+1 accelerated settlement on DTCC’s classic systems, those clients ready to integrate onto the ledger can begin development efforts and start to ready their firms for the future operating model without waiting for full-market adoption.
According to Michele Hillery, general manager of equity clearing and DTC settlement service at DTCC, the industry’s primary goal must be to create efficiencies without introducing additional risk to markets, and client participation and feedback at every iterative step of this journey will be pivotal to the continued success of the platform.
Hillery says: “Project Ion holds the promise of new settlement functionality supported by robust technical capabilities and is a key part of our on-going efforts to further accelerate settlement and build upon current same-day settlement capabilities.”
Murray Pozmanter, head of clearing agency services and global business operations at DTCC, comments: “Project Ion has demonstrated that settlement in a T+1 or T+0 environment are effective use cases for DLT, and we look forward to working with our clients and the industry to launch the new platform.”
In April, DTCC collaborated with the Securities Industry and Financial Markets Association, and the Investment Company Institute to accelerate the move of the US securities settlement cycle to T+1.
To read more about the industry’s settlement structure, click here.
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