LSEG tests DCM digitization platform developed with Nivaura

Rick Steves

This issuance marks an important milestone in capital markets automation and digitization and demonstrates the potential of such platforms to improve current capital market workflows.

London Stock Exchange Group (LSEG) has tested its new digital primary DCM Flow platform developed in partnership with Nivaura.

The pilot test has proved the paltform’s validity and efficiency as it has successfully processed a $7 billion syndicated issuance by the LSEG under a global MTN programme. The LSEG priced a syndicated multi-tranche and multi-currency offering raising circa $7bn equivalent across nine tranches.

Flow drives end-to-end automation in primary debt markets and is designed to automate the debt capital markets issuance process using structured data and General Purpose Legal Mark-Up Language (GLML), which Nivaura pioneered.

The LSEG issuance is the most complex transaction to use a primary DCM digitization platform as the bonds were listed on the Main Market of The London Stock Exchange, and settled in DTC, Euroclear, and Clearstream.

Nivaura has actively collaborated with regulators and capital market participants as it worked to solve the complex issues around the negotiation and documentation of structured data in the primary markets.

Its digital and automated workflow solutions are designed to be product-agnostic (e.g. between cash-settled products and tokenization) with configurable implementation options including: bespoke, private cloud, or on-premise deployment; customizable functionality and white-labeling; and real-time workflows which adapt in response to external data.

Nivaura pioneered the development of open-source General-purpose Legal Mark-up Language (GLML) to make legal document templates machine-readable, enabling transaction data in the document to be captured as “structured data”.

The human-readable mark-up language designed for easy use by lawyers or other professionals without any programming experience was designed with debt capital market transactions (particularly high volume MTN and CP issuance) in mind but has a much wider potential applicability.

Nivaura’s vision for GLML as an open-source, universal data standard that all market participants and technology providers can use, led to the creation of the GLML Foundation, which is an independent entity constituted by key capital market participants.

Dr. Avtar Singh Sehra, Founder and Chief Executive Officer of Nivaura commented: “It has been an honor for Nivaura to work closely with the LSEG, and Allen & Overy, in bringing the LSEG Flow platform to market and supporting its launch with LSEG’s debut multi-currency and multi-tranche transaction. This is the start of a new digitization and automation paradigm in the primary capital markets, where the LSEG Flow platform delivers proven technology to drive efficiency and effectiveness for all market participants.

“For Nivaura, our work here illustrates the flexible ways in which our expertise and solutions can be deployed with partners. We foresee a range of different approaches to primary markets efficiency being pursued, and we’ll act in line with our vision to fully digitize and automate primary markets.

“Cutting complexity, time, and cost out of primary capital markets by digitizing, automating and optimizing workflows is now a matter of urgency. GLML will play a crucial role in ensuring different new platforms can be interoperable, ensuring the market benefits fully from digitization and automation.”

Nivaura was selected to work with LSEG in 2019 under the FCA’s regulatory sandbox programme in which the financial watchdog accepted 29 businesses into cohort 5. The list of approved projects included a test that would integrate DLT within LSEG-operated listing and trading venues to test market infrastructure for the issuance of equity securities, evidencing the change of beneficial ownership.

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