State Street Corporation is to provide custody services to the Digital Securities Depository Corporation (DSDC).
DSDC operates a novel cross-border securities settlement infrastructure with third-party regulated financial institutions to more efficiently create, issue and service digital depositary receipts (DDRs) in the US public market. The securities underlying the DDRs will include the non-US listed equity securities DSDC holds in custody with State Street.
State Street will provide safekeeping, transaction settlement, dividend collection, and FX payment services to DSDC with respect to its holdings of non-US listed equity securities. At launch, the DSDC network aims to deliver UK’s FTSE 350 constituent equities more efficiently into the hands of US investors. DSDC is a newly created US company that provides the structure for governance and support of the DSDC infrastructure network which is enabled by KALYP Technologies, a UK-based technology provider for distributed market infrastructure to the world’s securities industry.
“State Street is delighted to be working with DSDC to support its growth strategy to diversify into additional markets,” says Nadine Chakar, head of State Street Digital. “This mandate is another example of State Street Digital continuing to deliver on our broader global strategy of helping to build out the crypto and digital assets ecosystem.”
Launched in June of this year, State Street Digital was created to address the industry’s evolving shift to digital finance. The new division builds on State Street’s prior digital capabilities and focuses on innovations in crypto, central bank digital currency, blockchain and tokenisation. State Street’s GlobalLink technology platform is also a component of State Street Digital.
“State Street is one of the largest and most respected custodians globally,” says Alistair Jones, CEO of DSDC. “Having them take care of the custody activities for the underlying securities of our digital cross-border securities brings considerable confidence to both investors and our other network members. This allows us to concentrate on our core competencies of building and expanding the network beyond the initial group of regulated institutions.”
“As institutional investors search for better returns and diversification, they continuously look for investment opportunities that deliver those benefits. The traditional American Depository Receipt structure that the market understands is a very convenient tool for diversification and remains in place. However, the servicing component, which has been around since the 1920s and has severe shortcomings, will receive a major upgrade from DSDC’s distributed market infrastructure,” says Thorsten Peisl, CEO of KALYP Technologies.
