BridgePort, an institutional digital asset middleware coordination layer, will begin piloting the Digital Asset Master Agreement (DAMA), a common legal standard for off-exchange settlement (OES) relationships between trading firms, custodians, and exchanges.
According to BridgePort, participants can utilise DAMA as a common starting point when establishing triparty settlement arrangements, forgoing the need to negotiate every new OES relationship from scratch.
The legal agreement also consists of a configurable template, designed to allow counterparties to reflect their own regulatory, commercial, and operational requirements.
The firm has begun the formation of a working group of trading firms, custodians, and exchanges to pilot the legal standard across live OES relationships.
Due to its reusable format, BridgePort intends for DAMA to address the costly and time-consuming onboarding delays that occur when firms negotiate OES arrangements.
DAMA’s standardisation coverage sets out safeguards and segregation terms for custody, defines how settlement credit is extended against collateral, addresses how operational failures are handled, and specifies what constitutes a default.
Commenting on the pilot, Nirup Ramalingam, CEO of BridgePort, says: “The next phase of this market depends on standardising the legal foundation beneath it, as has happened in every institutional market before.”
Steve Bartfield, chief product officer of BridgePort, adds: “Widely adopted frameworks create incentives for market participants, law firms, and industry organisations to develop shared legal analysis, operational expertise, and market practices that can be leveraged across the ecosystem rather than recreated for every new relationship.”
