Guido Stroemer (HQLA-X): Redefining Collateral Mobility
“HQLA-X exemplifies the intersection of a financial technology company collaborating with well-established, incumbent industry players to create innovative and transformative industry solutions.”
Can you present your company in a few words ?
HQLA-X is an innovative financial technology firm, based in Luxembourg, that leverages Distributed Ledger Technology (DLT) to bring game-changing efficiencies to the securities finance and repo industry. Our core clients are large global banks and asset managers active in the global securities finance and repo markets, and our unique selling proposition is to enable market participants to execute frictionless ownership transfers of securities with precision and certainty, all without the securities having to be relocated across a very fragmented global custody network. Industry-wide collaboration is at the core of our DNA. We entered into a strategic partnership with Deutsche Börse Group in 2018 to create our innovative and market leading operating model, which is now connected to a most formidable list of well-established and recognized global Custodians and Triparty Agents that includes Bank of New York Mellon, BNP Securities Services, Clearstream, Euroclear, and J.P. Morgan.
“From day one, we decided that our platform would be “built by the market, for the market””
What are the main trends that influence your activity?
Regulatory requirements for global banks and asset managers, combined with a global macro-economic backdrop of higher interest rates, are heightening demand from our growing client base to better optimize the allocation of their long inventory of securities to meet their ever-expanding collateral obligations. Collateral management efficiency has indeed become a key, strategic focus point for the global securities finance and repo industry, and HQLA-X are very well positioned to help market participants enhance their collateral management capabilities. The three key pillars for effective collateral management are 1) real time view of collateral inventory, 2) collateral mobility, and 3) and collateral optimization. HQLA-X’s core value proposition is to enhance collateral mobility, and we look forward to a long and bright future of collaboration across the securities finance and repo industry to help market participants modernize their collateral management activities.
How does your company adapt to these new developments?
Our company was founded in 2017 by Olly Benkert and me. From day one, we decided that HQLA-X would be a platform “built by the market, for the market.” The hype cycle for DLT was near its peak then, and the technology was considered by some as “a solution looking for a problem.” At HQLA-X, we’ve always taken the opposite approach. We lead with a detailed understanding of an industry pain point, and then collaborate with market participants to design and implement solutions to address the problem. This was the genesis for our initial platform design, and it remains the guiding principle for our product development today. Along with our clients, we deep dive on industry pain points, innovate around them and run a feasibility process. We always involve our clients to ensure that the proposed solutions work in scale.