Building Real-Time Collateral Infrastructure: Nasdaq's Partnership with Baton Systems

Capital markets have long grappled with the fundamental challenge of collateral mobility. The fragmented nature of today’s post-trade infrastructure—spanning multiple CCP models with varying interfaces, dispersed OTC counterparties across jurisdictions, and complex cross-border workflows—has created persistent operational friction. Market participants are forced into inefficient prefunding arrangements and collateral over-provisioning, tying up billions in capital that could otherwise be deployed productively.

This longstanding challenge is now intensifying as markets evolve toward continuous, ‘always on’ operations. The extension of trading hours and the growing expectation for round-the-clock market access are exposing the limitations of infrastructure that was never designed for seamless, real-time collateral movement. Combined with elevated capital costs and persistent market volatility driving unprecedented demand for liquidity optimization, the industry faces a critical inflection point.

A recent Nasdaq report found that one in every two firms is considering how distributed ledger technology (DLT) can help derive certainty around their collateral movements to address manual processing, high operating costs and settlement risk. With 25% of collateral currently tied up in corrective and non-interest-bearing measures, representing over $35 billion in excess or non-remunerated collateral, there is an overwhelming economic case to addressing this inefficiency.

How Nasdaq is transforming collateral workflows and mobility

Against this backdrop, I’m pleased to announce that Nasdaq is partnering with Baton Systems to transform collateral workflows and mobility across the global post-trade ecosystem.

Through this collaboration, Nasdaq Calypso will integrate with Baton to provide clients with advanced collateral workflow automation and fast, efficient asset mobilization capabilities.

Baton Systems occupies a unique position in the market. It operates a real-time network connecting major global banks and FCMs directly to CCPs. Baton normalizes the proprietary data produced by CCPs and provides a single, centralized interface to all connected venues through a DLT platform that acts as an orchestration layer, integrating seamlessly with existing systems. This enables efficient posting and recall of collateral instructions across multiple CCPs—addressing one of the most pressing operational challenges facing clearing members today.

Nasdaq brings comprehensive cross-asset trading, risk management, and collateral management capabilities, with deep experience in clearing and global connectivity. The integration of Baton’s real-time network with Nasdaq Calypso represents a significant advancement for Clearing Members and institutional clients worldwide, creating enhanced infrastructure for managing collateral workflows with unprecedented connectivity. The opportunity is substantial: unlocking trapped capital, reducing operational risk, and accelerating settlement to fundamentally improve market efficiency.

Why This Partnership Delivers Value for Global Clearing and Post-Trade Operations

This partnership addresses a fundamental challenge: the need for always-on, real-time clearing and post-trade infrastructure that eliminates operational friction and optimizes capital deployment. Baton’s proven platform, used by Global Systemically Important Banks, unlocks collateral optimization, intraday liquidity management, and real-time visibility across 17 CCPs.

For Nasdaq Calypso clients, the integration extends existing platform strengths with specialized collateral workflow services. While Calypso remains the central system of record for cross-asset lifecycle management and risk calculation, Baton’s connection unlocks trapped capital through optimized collateral mobilization. This modular approach means clients realize benefits without replacing core systems—critical for mission-critical infrastructure.

What makes this partnership compelling is Baton’s direct two-way connectivity between FCMs and CCPs. It offers live information on eligibility, margin requirements and access to CCP data that was not available previously to Nasdaq Calypso clients, as well as the ability to instruct movements across cash and securities for multiple CCPs, through a unified process.

Rather than building new infrastructure, we’re leveraging Baton’s established network that already processes billions in daily settlement volumes. This interoperability means faster time-to-value, with immediate access to automated collateral workflows that dramatically reduce operational complexity and cost.

Building on Nasdaq’s Technology Leadership

As an operator of critical market infrastructure and a leading financial technology provider, Nasdaq is uniquely positioned to lead this industry transformation, building on our deep commitment to modernizing capital markets infrastructure.

As demands for operational efficiency and capital mobility intensify, the need for connected, real-time infrastructure becomes essential. We’re enabling CCPs and clearing members to have access to next-generation collateral management capabilities.

The next generation of clearing infrastructure is being built today, architected for a world where real-time operations and capital efficiency are competitive necessities. Through this partnership with Baton Systems, we’re delivering that future to CCPs and institutional clients worldwide.

If you have any questions regarding this article, please contact Magnus Haglind at Nasdaq or Alex Knight at Baton Systems.