Equity Post-Trade Future-state process depiction Equity trade execution Clearing Settlement Asset servicing 1 4 Cash Equity SELL 100 3 5 6 Investor 1 2 Investor 1 Custodian 1 Smart Custodian 1 Smart Custodian 2 Investor 1 Investor 2 8 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 7 Custodian 1 Custodian 2 Cash Trade 9 * Trade commitments confirmation Distribute Corporate Proxy Bank 2 Investor 3 confirmation Investor 3 Custodian 2 Validation Investor 2 income actions statements Future-state process description 1 Similar to the current state, 3 Custodian banks send their 5 After matching all sections of 8 After required assets are investors use the interfaces section of the trade details to the trade, a smart contract transferred, equity and cash are provided by the bank of their the DLT on behalf of the determines the “net stored in safekeeping accounts choosing to place equity trade investor transaction” to minimizethe managed solely by custodian orders through the exchange 4 A smart contract validates the number of required banks 2 The exchange is responsible for trade details provided by all transactions 9 As various servicing processes matching the equity trade custodian banks (e.g. cash 6 Smart contracts ensure the occur, smart contracts notify orders placed by investors commitments and counterparty simultaneous transfer of equity custodian banks and investors across banks in order to confirm details) and matches all sections and cash between custodian in real time trades in real time and initiate of the trade in real time banks on behalf of all investors post-trade processes 7 Confirmation is stored in the DLT to facilitate future processes WORLD ECONOMIC FORUM | 2016 124