The Depository Trust and Clearing Corporation is to add cash settlement, including delivery-versus-payment, to its Loan/Serv suite for the syndicated loans market.
The addition of cash setlement will complement the company’s existing Loan/Serv reconciliation and messaging services, which were introduced in 2008 to automate the trading and tracking of syndicated loans for both agent banks and lenders. A timetable for testing and production will be issued in the third quarter.
DTCC has been working with an advisory committee comprising representatives from the Bank of New York Mellon, Barclays Capital, Citi, Deutsche Bank, JPMorgan, and the Royal Bank of Scotland, to thrash out the details.
“Delivery versus payment will provide certainty to loan traders that cash settles simultaneously with changes to asset ownership recorded by the agent banks,” says Chris Childs, vice president, global loans product management, DTCC.
“This will be another giant step for the syndicated loan market, making the market more secure and helping ensure that settlement takes place, accurately and on time,” says Eric Rosen, managing director at JPMorgan.
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