DTCC introduces Loan/SERV Messaging Service that will provide a secure and automated network for the transmission of standard loan messages between agent banks and lenders in the syndicated loan market.
The Messaging Service takes widely-used loan information, such as interest and principal payments, rate resets, drawdown notices and ongoing fee payments, and provides a secure and automated network for the transmission, receipt and online storage of these loan messages.
The Messaging Service will employ DTCC’s proprietary SMART (Securely Managed and Reliable Technology) network to transmit and receive messages, but customers will have the added flexibility of using other communications networks such as SWIFT.
Lenders and institutions that do not want to receive electronic messages directly into their processing systems are able to log on to a Loan/SERV messaging hub via a Web browser to view and process their messages.
DTCC’s European consultation group for Loan/SERV includes more than a dozen members from across the agent, custodian/trustee and buy-side communities, including Barclays Capital, Blue Bay, Cheyne Capital, Citi, CQS, Deutsche Bank, European Credit Management and The Royal Bank of Scotland. Citi and Deutsche Bank are already using the Reconciliation Service and JP Morgan will begin using it in the first quarter of 2009.
“The messages will go a long way to boosting efficiencies and reducing communication errors in loan processing,” says Bram Smith, interim executive director, LSTA. “The standards will give banks and lenders greater control over their communications and improve the reliability and timeliness of their communications in both the primary and secondary markets. We hope that all market participants will begin using the standard messages.”
“The standard loan messages and the Loan/SERV Messaging Service employ FpMLTM, the industry-standardized e-commerce language that the LSTA has worked to advance for the benefit of the global market,” says Christopher Childs, DTCC vice president, Global Loans Product Management. “FpML has already proven itself in the over-the-counter derivative-trading markets, where it combines speed, accuracy and security to provide an effective communication vehicle.”
L.D.