Clearstream, part of Deutsche Börse Group, has launched a central register for electronic securities in Germany, supporting first dematerialised issuances conducted by Deka Bank as well as MünchenerHyp in cooperation with DZ BANK.
With this step, Deutsche Börse introduces the first live component of its recently announced platform D7, a regulatory compliant, fully digital post-trade infrastructure enabling market participants to digitise their financial products with continuing access to both existing central and distributed infrastructures and markets.
The central register forms the basis for issuance and registration of electronic securities for the first time in Germany. Via a public node operated by Clearstream, issuance conditions are made available to the general public. Issuers and other stakeholders can view further details of the entries in the central register, such as legal and processing status, fixed nominals and redemptions. The central register directly connects to the well-established European post-trade infrastructure T2S and simplifies data flows for many upstream and downstream processes such as listing, trading and settlement.
The new German legislation for digital securities introduced earlier in 2021 (eWpG) now allows for digital issuance of securities in Germany, which historically required a paper certificate. In line with current legislation, certificates and commercial paper with fixed-amount global notes can now be entered into the central register.
Philippe Mueller, Head of Issuer CSD Services at Clearstream, says:
“The launch of D7 and the central register is the good-bye to paper certificates in Germany. Enabling issuance and registration of digital financial instruments will boost efficiencies for the whole market, building the foundation for the transformation towards true digital financial markets. Clearstream offers issuers a seamless digital experience for issuance and the whole securities life cycle, as well as investor reach Europe-wide.”
At the same time, multiple market participants, including BNP Paribas, DZ BANK, Goldman Sachs, Raiffeisen Bank International and Vontobel started the user testing phase of DI Execution, the second component of the D7 platform, which involved the simulated issuance of structured products. As of mid-2022, DI Execution will enable issuance, management and operation of digital instruments, throughout the life cycle of the product.
The test took place in the future operative system, with the aim to receive further valuable market feedback to ensure successful delivery of expected benefits to all participants. Further functionalities of D7 will be rolled out in phases over the next couple of years.