18
David Rutter
Chief Executive Officer
R3CEV
PNR

As a great leap in financial technology, what could compare with the distributed ledger applications that R3CEV is developing with a consortium of 55 financial institutions? CEO David Rutter looks back 20 years to a joint venture agreement that the Chicago Board of Trade struck with two firms that led to the introduction of trading on computer screens. One of the brokerages was Prebon Yamane, where Rutter was managing director for the Americas and later a co-owner. “It was considered outrageous then to think about the electronic trading of U.S. Treasuries and bond futures, with cross margining and the like,” Rutter recalls. “That was the first attempt to electronically trade cash Treasuries and futures.” His involvement in advanced trading technology didn’t stop there. Rutter built an e-markets business for Bridge Information Systems and, after two years as CEO of Prebon Energy, spent ten years at ICAP, rising to CEO of electronic broking, the business that included trading platform acquisitions BrokerTec Global and EBS. “I’ve always been pushing technology innovation,” says the 53-year-old. Reflecting Rutter’s enthusiasm for what New York–based R3 is pursuing, the company states on its website that distributed ledger technology could “change financial services as profoundly as the Internet changed media and entertainment.” Rutter says: “There has never been such a transformative technology for finance. This will change the way transactions are recorded forever.” Co-founded in 2014 by Rutter, CFO and former Sandler O’Neill + Partners investment banker Jesse Edwards and COO and ex–Standard Chartered executive Todd McDonald, R3 announced the blockchain consortium last September. Barclays, JPMorgan Chase & Co. and Goldman Sachs Group were in the initial group of nine. An additional 13, including Bank of America Corp., Citigroup and Morgan Stanley, had joined by month’s end, another 22 by December and 11 more as of late June. “A good way to think about it is that we’re pushing financial data into the cloud in a cryptographically secure way,” Rutter says. “If you are going to transform the way payments are made or securities are issued or settled, you can’t have a couple firms on the ledger. It requires a broader adoption from the start.”

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