D-FMI: Digital Financial Market Infrastructure

Harnessing DLT to power the financial market infrastructure of tomorrow

The Digital Financial Market Infrastructure (D-FMI) platform is our latest technology addition, based on Distributed Ledger Technology (DLT), aiming to improve market efficiency and connection through innovation.

The first service offering available on D-FMI is Digital Securities Issuance (D-SI), supporting the issuance, distribution and primary market settlement of fully dematerialised international securities - Digital Native Notes (DNN), on DLT.

This is a key milestone in the digital journey of Euroclear and very much at the heart of our strategy and vision to become a data and digital enabled FMI.

Watch the D-FMI video >

Evolving landscape

In recent years, market participants have demonstrated a wider acceptance of DLT and its potential for significantly transforming global capital markets as it continues to evolve. The key driver for its success in both pre-trade and post-trade spaces will be technology that can provide open shared data in a controlled safe environment.

Full secondary market operations

D-FMI is connected to the traditional settlement platform of Euroclear Bank for secondary market operations, granting investors full access to trading venues and liquidity management facilities.  A key benefit of this service is full integration within Euroclear Bank which provides the solution with Central Securities Depositories Regulation (CSDR) compliance.

Digital Securities Issuance

D-SI is the first service offering available on D-FMI. It offers a real DLT environment for the issuer ecosystem while enabling secondary market investors to trade in DNN on the traditional settlement platform – all in compliance with CSDR.

This means the deal is priced, the new securities are distributed, and the secondary market activity all settle on the same day.

As a first step, our D-SI service is available for the issuance on a non-syndicated basis of digital Euro Medium Term Notes (EMTN), i.e. DNNs, under programme with Euroclear Bank as the sole issuer Central Securities Depository (CSD).

Our D-SI service covers:

  • the acceptance of DNNs with the automatic ISIN allocation (XS ISIN)
  • the Issuing Agent authorising the creation of the DNNs
  • the Delivery-Versus-Payment (DVP) settlement of the distribution in EUR or USD. Once issued, DNNs are held directly by participants in Securities Wallets on the D-FMI Component
  • the transfer of the securities and cash proceeds from the D-FMI component to the traditional component of our settlement platform to facilitate secondary market operations, safeguarding the liquidity.

Investors wishing to purchase DNNs on the secondary market are able to hold and transfer such securities within Euroclear Bank through the traditional settlement platform.

World Bank Issuance

The inaugural DNN was issued by the World Bank (International Bank for Reconstruction and Development, IBRD, rated Aaa/AAA), raising EUR 100 million to support the financing of the World Bank’s sustainable development activities and was listed on the Luxembourg Stock Exchange. Citi’s Issuer Services acted as the issuing and paying agent, TD Securities as the dealer, and Euroclear Bank as the issuer Central Securities Depository.

Read the press release here >

DLT at Euroclear

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