Delta Capita acquires the capital markets wing of blockchain firm SETL

Delta Capita has acquired the capital markets business of SETL, helping to strengthen the offering of digital capital markets ecosystems. The new Delta Capital Distributed Ledger Services wing this has created has also welcomed a key anchor client following the move, in the form of capital markets infrastructure firm Montis.

After a decade of individualized digitization, a significant proportion of the technology infrastructure in the financial sector has been tailored to each bank – even when doing so provides no competitive advantage. In the future, this is likely to see banks consolidating into a single service provider for general capabilities – one service, many customers. This means that professional service firms are currently in a race to present themselves as a potential service provider in this capacity.

Delta Capita’s core customer base is broker-dealers, sub-managers and global custodians. As such, it is very much engaged in this arms race – part of which is that it looks to increase its distributed ledger technology (DLT) offering. The consultancy has acquired SETL Capital Markets – its DLT wing – for this purpose.

Founded in 2015, SETL is an initiative to deploy an institutional payment and settlement infrastructure, based on blockchain technology. The organization builds blockchain-based solutions for financial markets, asset management and payments, with its core technology being proprietary mechanisms that maintain a distributed ledger of ownership and transaction records, simplifying the process of matching, settlement, custody, registration and transaction reporting. This enables market participants to move cash and assets directly between each other.

If Delta licenses the software, its own subsidiary will receive the license fees from DLT clients. However, Delta Capita’s alliance with SETL’s DLT wing also has several advantages from SETL’s perspective. It brings in cash and helps expand SETL’s use in the capital markets.

This provides a route to commercialize existing IP “given Delta’s global presence and specialization in capital markets,” according to SETL’s Anthony Culligan. He also told market news site Ledger Insights that both SETL and Delta would be “free to develop the software and market to their respective capital markets clients subject to these arrangements.”

Montis

Both sides believe the deal enables each firm to have an incredible impact on the capital markets, and it has already seen Delta Capita acquire an anchor client in digital ecosystem firm Montis. Aiming for a start date towards the end of 2024, Montis has signed up Delta Capita Distributed Ledger Services to provide the SETL technology and software development of core CSD services for debt and equity products, which include innovative blockchains, as well as enhancing Archax Exchange and SWIFT- connectivity, among other goals. As part of this agreement, Montis Group will also take a minority stake in Delta Capita Distributed Ledger Services.

Joe Channer, CEO, Delta Capita, added: “Delta Capita is a specialist provider of services across the capital markets value chain. We are delighted to acquire SETL’s capital markets business and work with Montis to help them realize our shared vision for asset tokenisation. Delta Capita Distributed Ledger Services represents our strategic intent to be at the heart of this next exciting chapter of capital markets and technology innovation.”

Recent research found that blockchain investment is now a high priority among more than nine out of ten decision makers in the financial services industry. However, security and privacy concerns still persist for the majority of market leaders.