Securitized Products

10XTS

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Across the value chain, inefficiencies today include:

  • Origination and underwriting of underlying loans: long lead times; lack of data. standardization (contract terms, credit profiles, collateral); highly paper intensive; decentralized information and storage; costly to access and reconcile data.
  • Security structuring: complex, manual and costly processes to evaluate, rate and pool loans, which is often duplicated across multiple parties; slow, opaque and manual settlement processes.
  • Trading: except in certain MBS, relatively shallow over-the-counter markets, with constraints in liquidity and significant market information asymmetry.
  • Loan servicing: manual process to monitor and collect payments; limited insights offered to investors; fragmented account management.
  • Security servicing: costly due diligence and research due to absence of single source of truth; time lags leading to out-of-date or imperfect information; manual/slow reconciliation (time lags between loan payments and investor distributions).

Debt Markets

Solutions for Debt Markets

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Challenges that we specifically address through our solutions include:

  • Inefficiencies in issuance, trading and post-trade processes
  • Illiquidity in secondary markets and limited primary market issuance
  • Limited access to markets due to high minimum transaction sizes

As with other asset classes, various institutions attempt to address these challenges through both end-to-end platforms and solutions that are more narrowly focused on specific components of the value chain as opposed to our approach to offering an end-to-end platform for the full lifecycle of the asset.

Given the fragmented, over-the-counter nature of secondary market trading, bonds will significantly benefit from XDEX as they’re easier to transform into a digital financial instrument, without requiring wholesale market transformation.

  • The bond issuance process is highly manual and prolonged, with significant time required to issue and receive proceeds.
  • Because secondary markets are largely over-the counter, liquidity tends to be fragmented, with limited ability to accurately price trades.
  • Corporate bond markets tend to face limited secondary market liquidity overall, thereby limiting some investor interest and affecting cost of capital.
  • Trading processes are largely manual, leading to significant inefficiencies and poor data quality for all participants.
  • Relatively high minimum ticket sizes (given high transaction costs) exclude most retail investors.
  • All parties retain siloed data structures, calculating payments and other transactions independently using reference data, thus creating inefficiencies.
  • Extended settlement time frames add additional cost and risk.

Equity Markets

Solutions for Equity Markets

How We Help Equity Markets

Legacy equity markets can only achieve efficiency through centralization, and participants still face challenges associated with legacy processes and systems. These factors combine to make equity issuance relatively expensive, limiting issuers to only the largest companies in any market.

  • Settlement/counterparty risk, requiring costly margins and capitalization of the central counterparty
  • Data siloes between institutions, requiring manual reconciliation across the life cycle of equities
  • Substantial numbers of intermediaries involved in transactions, many required by regulation
  • Aged legacy infrastructure systems in many jurisdictions

How We Help Equity Markets

While most market participants and service providers consider operations and infrastructure in equity markets to be efficient, our solutions:

  • Introduce greater flexibility in clearing and settlement timelines
  • Reduce or eliminate settlement risk
  • Address operational burdens associated with data siloes in post-trade processing

XDEX is uniquely suited to optimize post-trade operations and life-cycle management, by:

  • Synchronizing references and mutualizing workflows across all parties involved in trading, settlement, custody or corporate actions, thereby limiting the need for manual reconciliation
  • Automating settlement instructions and/or corporate actions processes using smart contracts
  • Reducing settlement risk and/or settlement time frames or enabling greater flexibility in settlement time frames