The Depository Trust & Clearing Corporation took a further step towards overtaking the bank-owned Swapswire by extending its Deriv/SERV platform to provide automated matching and confirmation services for interest rate swaps and swaptions, equity swaps and variance swaps.
“We are pleased to have worked with DTCC along with other key members of the OTC derivatives market to add these products to the Deriv/SERV platform,” says Ann Marie Davis, managing director, Global Operations, Citadel Investment Group LLC. “The ability to process trades for all our derivatives products through a single platform is of particular interest to us and other market participants. This expansion in Deriv/SERV’s services is an important move in that direction.”
“These recent enhancements reflect DTCC’s commitment to delivering a fully-automated processing solution for a broad range of products in the OTC derivatives market,” adds Janet Wynn, managing director and general manager, DTCC Deriv/SERV. “We believe that these additions will be particularly attractive to our 100 buy-side customers, who are charged no fees to use our various OTC derivatives processing services, as well as the 23 major global dealers, who will benefit from higher trade confirmation rates.”
Deriv/SERV already provides services for single reference entity credit default swaps, credit default swap indices, equity index options and equity share options. Its matching and confirmation services will support interest rate swaps and swaptions, equity swaps and variance swaps will also handle such trade life cycle events as new trades, full or partial terminations, increases, amendments and exits.
DTCC says customers currently using the Deriv/SERV platform will be able to begin matching and confirming or affirming transactions for these new products immediately. New customers, can access the service through an Internet connection.
“We have worked hard to fashion flexible, automated confirmation processes for both interest rate swaps and equity and variance swaps that offer firms a choice of two-sided matching or affirmation that are well suited for the dealer-to-customer market,” says Peter Axilrod, managing director, Business Development for DTCC.
DTCC first entered the OTC derivatives market in November 2003, by supporting matching and confirmation for credit default swaps, Wynn claims that the service has been an important driver in helping increase automation rates in these products.
According to the International Swaps and Derivatives Association (ISDA), automated confirmation of credit derivatives trades has grown from about 6% in the beginning of 2004 to over 40% by the end of June 2005.