In an encouraging turn of the tide, pools of liquidity are finally forming in the digital securities ecosystem. Tempering the sector’s progress, however, is the lack of a “common playbook” to guide its development. At Sibos this year, six industry insiders weighed in and shared a close-up look at the sector’s current development in a “Meet the experts” panel session by fintech firm Broadridge.

Broadridge’s “Meet the experts: The digital securities ecosystem – a reality” brought on stage:
Horacio Barakat, head of digital innovation for capital markets, Broadridge,
Steve Everett, head of business strategy and innovation, CDS,
Colin Parry, CEO, ISSA,
Thomas Sullivan, managing director, Société Générale – Forge, and
Rajeev Tummala, head of digital and data for Asia and MENA, HSBC Securities Services, under moderation by
Barnaby Nelson, CEO, The ValueExchange.

Liquidity “can mean different things to different people”, points out Thomas Sullivan of Société Générale’s Forge. The managing director of the French bank’s digital asset service subsidiary lists what liquidity means to him: having a market for a product’s sale, and being able to get finance quickly. He is particularly excited about “the true liquidity that is happening in issuances on chain”, citing direct-to-retail tokens by Franklin Templeton and Visiontree as examples.


Horacio Barakat, the head of digital innovation for capital markets at Broadridge shares an expanded take on liquidity: “Liquidity’s not just about speed. A lot of it is flexibility,” he says. When it comes to achieving that, he believes smart contracts are an under-utilised tool that gives “the ability to mutualise workflow, allowing anyone to access liquidity not just as fast as they can, but also as fast as they want to”.

Play well together

Although the pools of liquidity point to promising developments in the space, all panellists on stage were in agreement that there are still obstacles to the scaling of digital securities. Rajeev Tummala, head of digital and data for Asia and MENA at HSBC Securities Services is of the opinion that a “common playbook that allows natively digital assets to coexist with traditional assets” is necessary, and that it should be set up jointly by financial markets infrastructures (FMIs) and large players within the ecosystem.

“There’s the necessary evil of being able to live with the existing ecosystem, warts and all,” Steve Everett, head of business strategy and innovation at The Canadian Depository for Securities (CDS) says in agreement. “The easiest way to get from point A to point B is the coexistence that tokenisation gives, and the interoperability that you can create between the digital world and what I would call the electronically represented world.”

Stop the waiting game

While the co-existence of new and legacy systems is unavoidable and looks to be the industry’s reality for the near future, Rajeev Tummala proposes an unusual strategy for speeding things up. “Do we really need to wait for the external ecosystem to start treating assets as tokenised assets?” he asks. “What is stopping an institution from iteratively upgrading its infrastructure to treat every asset it has under custody as a smart asset, as a programmable asset?”

He believes that a blanket tokenisation of all securities is “primarily where maximum efficiency is going to come from. “Keep internal infrastructures as native digital infrastructures,” he suggests, but admits that this is an undertaking that would only become possible when the build ecosystem of DLT is mature.

Word of caution

Colin Parry, CEO of the International Securities Services Association (ISSA), is a little more cautious, pointing out that the question of digital asset custody is one that needs to be answered before significant developments can take place. “Until investors understand that their (digital) assets are safe and kept at the same level of security as the present assets, I think we’ve got a problem as an industry,” he says. “How do we custody the assets? How does that work across public and private networks? Are FMIs actually the right place to set up the initial governance to keep those assets safe? These are all the questions that I think we need to answer.”

“For this to take off at scale, we need to have much more collaboration across the industry…People are building walled gardens. We saw what happened with the walled gardens in the traditional market. We should avoid it this time round.”

Sibos 2023 played out in Toronto from 18 to 21 September, with about 9,000 registered delegates. We were there, producing mainly video interviews, but also some text pieces. Overview our coverage here.