SDX, the Zurich-based digital asset infrastructure subsidiary of SIX Group, has partnered with RULEMATCH, the institutional crypto and digital asset trading venue, to deliver a comprehensive, institutional-grade, end-to-end solution for the digital asset market, aimed at addressing the challenges of efficiency, security, and compliance for banks and financial institutions. This collaboration marks a significant step in the maturity of the crypto market in Switzerland and beyond by offering integrated trading, clearing, and secure custody services.
The partnership allows institutional investors to trade on RULEMATCH’s platform, with post-trade clearing and settlement through SDX, eliminating the need for pre-financing trading activities. Crypto assets can be securely held in SDX’s custody, with collateral management streamlined via a dedicated SDX account. This approach reduces reliance on holding collateral directly with trading venues and ensures faster increases in crypto collateral positions—circumventing delays typical of traditional on-chain transactions.
“Through our partnership with RULEMATCH, we will be providing an integrated solution for the trading, settlement, and custody of crypto assets,” says David Newns, Head of SIX Digital Exchange, in conversation with TradingTech Insight. “This full-service platform focuses on efficiency, security, and regulatory compliance, with custody powered by SDX’s Web3 product and trading facilitated via RULEMATCH, who offer a highly capital-efficient trading platform targeting the institutional market segment, with institutional-grade technology – including the use of Nasdaq’s matching engine – and low-latency infrastructure. Given their market position and our expertise, this partnership is a natural fit.”
The combined solution aims to resolve key industry issues such as speed, compliance, and market fragmentation. By offering transparency, capital efficiency, and a clear separation of trading and custody, institutional investors retain full control over their collateral with SDX’s custody services, which allow for asset segregation by crypto address.
“The key benefit is efficient trading with net settlement on a T+1 basis,” says Newns. “This means institutions can trade actively without needing to pre-fund their transactions, benefiting from the efficiency of netting. They can hold their crypto assets off-venue at SDX and make a single settlement transfer per asset at the end of each trading day.”
He continues: “One of the key challenges for institutional participation in crypto trading is not liquidity access, but the trading and settlement process. Pre-funding is unfamiliar in the institutional space and significantly reduces the efficiencies that institutions are accustomed to in FX, equities, and derivatives markets, where netting of trades—whether intraday or T+1/T+2—is standard. Shifting to pre-funding represents a major change. This solution addresses those challenges by providing access to institutional-grade trading technology and liquidity, combined with a familiar and highly optimised trading and settlement process for institutional participants.”
The RULEMATCH-SDX Web3 integration is expected to be available for banks and securities firms in Switzerland from Q4 2024.
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