Credit Suisse and Nomura-owned broker-dealer Instinet have settled U.S.-listed equity trades on a same-day settlement cycle (T+0) via Paxos’ blockchain-based settlement service.
Paxos announced the news on Tuesday, saying the equity trades occurred at 11 AM ET and 3 PM ET on a day and were settled at 4:30 PM ET on the same day. In the legacy system, settlement can only occur the same day if trades are completed before 11 AM ET, and therefore is “rarely utilized,” said Paxos.
This is not the first time Credit Suisse and Instinet have worked with Paxos on a trade settlement. Last year, the duo settled U.S.-listed securities trades in a live environment for the first time when Paxos Settlement Service was launched.
That settlement was on the standard T+2 settlement timeframe. The same-day settlement demonstrates the future capability of the platform, said Paxos.
“These advancements will ultimately benefit the broader market as more firms join the platform,” said Credit Suisse’s head of distributed ledger strategy Emmanuel Aidoo. “We’re pleased to work with Paxos and Instinet to advance this technology, which will help unlock capital, increase liquidity and reduce risk over time.”
Paxos launched the settlement service, based on its private, permission-based blockchain, last year under no-action relief from the U.S. Securities and Exchange Commission (SEC) staff. Paxos today said it will apply for full clearing agency registration with the SEC and hopes to secure registration sometime this year.
If granted the registration, Paxos said it plans to provide the industry with greater flexibility around their settlement cycles, ranging from T+2 to T+0.