Equity Post-Trade Future-state benefits Equity trade execution Clearing Settlement Asset servicing 1 2 Cash Equity SELL 100 3 4 Investor 1 2 Investor 1 Custodian 1 Smart Custodian 1 Smart Custodian 2 Investor 1 Investor 2 6 Investor 3 contract contract Bank 1 Safekeeping SELL 100 Trade date/ accounts Investor 2 Exchange Investor 2 Custodian 1 details Investor 1 Investor 3 Counterparty BUY 100 details 5 Custodian 1 Custodian 2 Cash Trade 7 * Trade commitments confirmation Distribute Corporate Proxy Bank 2 Investor 3 confirmation Investor 3 Custodian 2 Validation Investor 2 income actions statements Future-state benefits 1 Reduced settlement time: 2 Standardizeddata 4 Reduced operational risk: 6 Reduced account complexity: through downstream, post- requirements:standardizing through the use of a smart custodians will be able to store trade automation and efficiency data fields for trade matching contract to transfer equity and assets with greater flexibility enhancements, settlement improves the efficiency of cash, the likelihood of since integration with securities could potentially be reduced to existing clearing processes technology and/or manual settlement systems will no real-time settlement, trade date 3 Reduced counterparty risk: 5 errors is decreased longer be required plus one day or trade date plus through automated validation, Real-time confirmation: by 7 Servicing disintermediation: two days custodians benefit from the storing trade confirmations on servicing activities initiated via a reduced likelihood that the DLT, investors can receive smart contract eliminate the counterparty is unable to settle notification of settlement need for third-party without relying on a custodian intermediaries WORLD ECONOMIC FORUM | 2016 125