Outpacing change – Etay Katz

From day one as a lawyer, Ashurst Regulatory Partner and Bank Industry Chair Etay Katz has focused on financial regulation. His passion for the sector was originally ignited following a secondment to the UK’s Financial Services Authority. In the 20+ years since then, his career has been characterised by the constant and often significant legal, regulatory and market change in this space – including the seismic GFC events.

Etay’s willingness to embrace change and his courage to lead the way in defining a new field of digital assets have recently been recognised with a string of awards for his team’s cutting-edge work on the Goldman Sachs Digital Assets Platform project. This infrastructure solution project is the first of its kind and paves the way for the global success of the rapidly evolving digital assets market.

Reimagining financial markets

The Goldman Sachs Digital Assets Platform facilitates the issuance, registration, settlement and custody of digital assets, including digital bonds and other securities. Its distributed ledger technology platform is built on private permissioned blockchain technology, and augmented by a smart contract application layer. It works across jurisdictions and can be leveraged in all global capital markets.

The platform has already been successfully used to issue a €100 million-denominated digital bond for the European Investment Bank, setting the benchmark for market transactions to follow.

“When I started getting involved in this space six years ago, many people looked at me curiously because it was so speculative at the time. But I recognised the potential and followed it through. That experience culminated in me having the pleasure and privilege of leading Ashurst’s global team as we worked alongside the Goldman team as they advanced their innovation agenda. Seeing the bond issued was a dream come true,” said Etay.

He added: “We are currently seeing the most intense transformation of global financial markets and the banking sector more broadly. Digital assets will shake up every component of the current market structure. With Goldman, we have been reimagining this architecture pillar by pillar because banks need to address the change at an existential level. Without question, it is the most exciting project I have ever worked on. It’s also the most rewarding, as I have tapped into every aspect of my body of experience to help create a solution that resonates with my deep conviction that this will fundamentally change the financial markets and the way banking is done.”

In undertaking this project, Goldman Sachs has led the way in transforming the market using a single ‘golden’ source of data. However, the global market uptake of this transformation won’t occur overnight. As Etay explained: “The key challenges with such a significant transformation will always be adoption and the transition from state A to state B. Goldman is a brave innovator and has claimed the opportunity to be architects of the new financial market in an incredibly well thought out way. It has effectively stitched together technology, operations and market adoption – that’s the magic. I have no doubt Goldman is likely to reap the benefits of being first to market in putting these foundations in place. I’m also convinced that, once others see what’s possible, this type of platform will become the new paradigm.”

Etay is convinced that distributed ledger technology, which uses ledgers stored on separate, connected devices in a network to ensure data accuracy and security, is here to stay and will become the norm in financial market transactions and interactions over time. “The advantages of the technology are proven, including instantaneous engagement, integrity of data, and real-time sharing of data with participants in the network. When you couple that with smart contracting, it has the potential to transform most processes in the market as we know it,” he explained.

An exhilarating, exhausting process

In Etay’s words, the Goldman Sachs Digital Assets Platform project “wasn’t easy – but we weren’t looking for easy”.

“Being first is a demanding position but it’s where we want to be. Our clients are ready to innovate before laws and regulations provide the framework. Our role is to deliver the experience, insight and foresight to make the innovation process more productive. Of course, when you are rewriting the playbooks as you go there are invariably regulatory and legal voids to navigate, which often involve multiple systems of law and the global market,” Etay said. “This complex project took insight, judgment, courage, conviction, and the ability to influence consensus across all stakeholders. It also demanded that our entire multidisciplinary, cross-border team be at their best as lawyers and as colleagues. We had to be creative, agile, and aligned with our client – always. It was exhilarating and exhausting, and I couldn’t be prouder of the team effort that went into this ground-breaking solution,” he added.

Etay led the Ashurst project team with counsel Sidika Ulker and was assisted by finance regulatory partner Bradley Rice, consultant David Capps, senior associates Sophie Skeet and Jamie Jefferson Ng, and associates Hannah Pack and Hannah Sheikh. The wider team included Frankfurt-based finance regulatory partners Detmar Loff and Conrad Ruppel and associates Cornelius Hille, Tobias Bauerfeind and Gréta Müller, Paris-based finance regulatory partner Hubert Blanc-Jouvan and associate Francesco Assi, London-based digital economy partner David Futter, counsel Victoria Thompson, senior associate Denae Engelbrecht and associate Harry Newton, and London-based capital markets partner Anna Delgado and counsel Conor Funston. Partner Marc Mouton of Arendt & Medernach led on matters pertaining to Luxembourg law.

While Etay is proud of the team’s market recognition for this project, Goldman’s feedback has been what he has most prized. In the media release announcing the success of the project, Abeetha Pitigala, Digital Assets, Vice President at Goldman Sachs said: "We have a longstanding relationship with Ashurst, and have been delighted with the way in which they worked tirelessly and effectively to get this new platform to launch on a tight timetable. Ashurst's industry knowledge, responsiveness and agile thinking have been critical for the successful development and launch of the platform."

The importance of being human

Given the innovative space in which he works, it’s little surprise that Etay has experienced a rich mix of successes and setbacks during his career. He’s always ploughed forward with a positive attitude and a ‘human’ approach. “This is a long career that takes stamina. I’ve learned that it's critical to bring your authentic self to work, to stand for something, and to respect your clients and colleagues,” said Etay.

Etay’s family and his heritage are a big part of his wider life.

When he’s not re-inventing the financial markets, he’s usually spending time enjoying life with his wife and four children. Occasionally, he’ll also indulge in emptying his mind of everything but the road in front of him while riding his motorbike.

Etay says being born and raised in Israel, where he lived before moving to the UK 30 years ago, “is also a big part of who I am”. He is also proud of the three years he spent at sea in the Navy before becoming a lawyer.

Connect with Etay on Linkedin and download our Future Forces report to read his perspective on digitalisation (page 37). You can also find out more about the megatrends impacting the banking industry.