The Depository Trust & Clearing Corporation (DTCC) has signed its 100th customer for Deriv/SERV automated credit default swap (CDS) matching service.
Launched in November 2003, Deriv/SERV’s 100 customers include the 20 largest global dealers in credit derivatives and more than 80 leading buy-side firms including hedge funds and investment managers.
“DTCC, in discussions with leading market participants, identified early on the need to offer a complete range of automated end-to-end post-trade processing solutions for OTC credit default swaps. This includes the affirmation and confirmation of credit default swap trades as well as payment matching and bilateral netting.” said Peter Axilrod, managing director, DTCC New Business Development.
DTCC signed its 100th customer 18 months after launching Deriv/SERV’s CDS matching and confirmation service and has an additional 100 buy-side firms in various stages lined up to join the service. A key driver in advancing STP, in just one year since Deriv/SERV entered the market, electronic processing for credit derivatives increased nearly six fold to 35% in 2004, according to data recently released by ISDA. This is up from about 6% the previous year.
OTC derivatives, which represent a relatively young market, have experienced phenomenal growth in the past few years. According to ISDA, the global OTC derivatives market reached about $197 trillion in notional value as of December 2004. The notional market value for credit derivatives alone grew 213% last year to $8.42 trillion in notional value.