By Digital Asset
Further readingASX Gives Digital Asset’s Technology Green Light to Replace CHESS Synchronize New York 2019: Digital Asset and DLT in the Real World Unlocking New Investment Opportunities with Digital Assets Update on Open-Sourcing Plans for Digital Asset Modeling Language (DAML) The Evolution of Legacy Market Infrastructure
Committed Settlement: Adoption under UK Law, an analysis by Linklaters
By Digital Asset. Sep 26, 2019
Digital Asset’s Committed Settlement: Adoption under UK Law, an analysis by Linklaters
By Charlie Yeh, Assistant General Counsel, Digital Asset
In July we wrote a blog about Committed Settlement, a smart contract-based methodology that effortlessly and near instantaneously creates control accounts on a distributed ledger. Control accounts have been used for decades to hold collateral from a pledgor and protect a secured party against the default or bankruptcy of the pledgor.
With the right legal framework, Committed Settlement can give you the ability to create, record, notify and/or perfect security interests (depending on the jurisdiction) in a fraction of a millisecond, with minimal cost and just a few lines of DAML code. With these efficiencies, the way we approach bankruptcy proceedings, collateral and risk management - and potentially all financial transactions in general - could change.
Working with King & Wood Mallesons, we analyzed whether our Committed Settlement methodology would work under the legal framework in Australia and Hong Kong to validate that this is more than just a smart technical concept, but a method that could actually hold up under local bankruptcy law.
Now, we’ve collaborated with the leading global law firm Linklaters to analyze how the Committed Settlement would work under existing UK law. Linklaters just published a report that considers the key issues from an English law perspective.
When developing the technical details of Committed Settlement, our guiding principle is that technology should support the existing legal frameworks governing business transactions and exchanges of value. Technology should not assume or attempt to change statutes and caselaw in order to support the value exchange it enables. It’s with this in mind that Linklaters outlines in a new thought piece the key legal and regulatory considerations relevant to the implementation of our Committed Settlement technology from an English law perspective.
Download the Linklaters report here.
Charlie Yeh is an assistant general counsel at Digital Asset where he helps clients understand how distributed ledger and smart contract technology align with prevailing legal frameworks. Previously Charlie served as legal counsel to JPMorgan’s prime custody, clearing and collateral management businesses. He helped JPMorgan reduce its trillion dollar intraday exposure to clearing repurchase agreements and establish segregated IM control accounts on behalf of it clients.