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UBS Group Conducts Intraday Cross-Border Repurchase Transaction Using Distributed Ledger Repurchase (DLR)

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According to reports, UBS conducted its first intraday cross-border repurchase transaction with a global Asian bank using Broadridge\’s Distributed Ledger Repurchase (DLR). Beatriz

UBS Group Conducts Intraday Cross-Border Repurchase Transaction Using Distributed Ledger Repurchase (DLR)

According to reports, UBS conducted its first intraday cross-border repurchase transaction with a global Asian bank using Broadridge’s Distributed Ledger Repurchase (DLR). Beatriz Martin, head of finance at UBS Group, stated that intraday repo is a valuable tool for managing our liquidity usage, providing flexibility to our financing capabilities while reducing operational risks.

UBS conducts intraday cross-border repurchase on blockchain

Introduction

UBS Group recently made headlines after conducting its first intraday cross-border repurchase transaction with a global Asian bank using Broadridge’s Distributed Ledger Repurchase (DLR). The transaction was a success, and Beatriz Martin, head of finance at UBS Group, stated that intraday repo is a valuable tool for managing liquidity usage while providing flexibility to financing capabilities while reducing operational risks.

What is Intraday Repurchase?

Intraday repurchase is a financing tool that provides the flexibility for financial institutions to manage their liquidity usage throughout the day. It is a repo transaction that is executed and unwound within the same day, allowing for better risk management and operational efficiency.

Cross-Border Repurchase Transaction

A cross-border repurchase transaction involves the sale of securities with a simultaneous promise to repurchase them at a future date at a predetermined price. UBS Group’s recent transaction with a global Asian bank using DLR was the first intraday cross-border repurchase transaction for the bank. DLR’s distributed ledger technology enabled the transaction to be executed quickly and efficiently, reducing operational risks and increasing transparency.

Benefits of Intraday Repurchase

Intraday repurchase transactions offer several benefits for financial institutions. Firstly, the increased flexibility for managing liquidity usage enables banks to meet short-term funding requirements. Secondly, intraday repurchase transactions provide more efficient use of collateral and funding, reducing risks and improving overall operational efficiency. Lastly, intraday repurchase transactions reduce financing costs and counterparty risks, making it an attractive financing option for banks.

Distributed Ledger Repurchase (DLR)

DLR is a blockchain-based platform that enables the efficient execution and settlement of intraday repurchase transactions. It uses distributed ledger technology to automate the entire lifecycle of the transaction, reducing operational risks and increasing transparency. DLR also enables real-time monitoring, giving financial institutions greater control over their intraday liquidity usage.

Conclusion

UBS Group’s recent intraday cross-border repurchase transaction using DLR highlights the potential of distributed ledger technology in revolutionizing the banking industry. Intraday repurchase transactions offer numerous benefits to financial institutions, including increased flexibility, reduced operational risks, and improved operational efficiency.

FAQs

1. How does DLR reduce operational risks?
DLR uses distributed ledger technology to automate the entire lifecycle of intraday repurchase transactions, reducing the potential for errors and increasing transparency.
2. What are the benefits of intraday repurchase transactions?
Intraday repurchase transactions offer increased flexibility for managing liquidity usage, more efficient use of collateral and funding, and reduced risks and costs.
3. How does intraday repurchase differ from traditional repurchase transactions?
Intraday repurchase transactions are executed and unwound within the same day, while traditional repurchase transactions can have longer tenors. Intraday repurchase transactions also provide greater flexibility and improved risk management.

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