S&P Dow Jones Indices, Kaiko, and Derivnex announced the completion of an OTC swap transaction on the Canton Network, according to a press release. The total return swap was executed between DRW and Marex on Derivnex, an institutional OTC derivatives platform built on Canton.

The transaction references S&P Dow Jones Indices' iBoxx USD Liquid Investment Grade Index, which was tokenized on Canton by Kaiko. The companies describe it as the first OTC derivative to reference a fully tokenized index on distributed ledger infrastructure.

The trade was represented on Canton as a smart contract containing transaction terms, giving DRW and Marex a shared, synchronized record for managing valuations and other swap lifecycle events throughout the trade's lifecycle. Kaiko also distributed signed S&P Dow Jones Indices official index values that Derivnex uses to value the position.

Derivnex incorporates the Common Domain Model (CDM), providing a standardized digital representation of derivatives transactions and lifecycle events. The platform is designed to allow bilateral OTC counterparties to coordinate transaction workflows while maintaining confidentiality.

"OTC derivatives are one of the largest markets in institutional finance, but much of the infrastructure supporting them remains fragmented," said George Harrington, CEO of Derivnex.

"This transaction shows how established benchmark infrastructure can support new institutional market structures," said Cameron Drinkwater, Chief Product Operating Officer at S&P Dow Jones Indices.

Nilesh Jethwa, CEO of Marex Solutions, said the transaction provides a practical example of how OTC derivatives can be represented and managed on distributed ledger infrastructure.

Future functionality is expected to connect Derivnex-managed positions with digital cash and collateral on Canton, enabling margin, collateral, and contractual payments to move within the same infrastructure as the underlying transaction.

S&P Dow Jones Indices is a division of S&P Global (NYSE: SPGI).