Central Settlement

DTCC’s Trade Information Warehouse (TIW), through a partnership with CLS Bank International (CLS), offers central settlement services for over-the-counter (OTC) credit derivatives contracts held at the Warehouse.


The central settlement service automates the exchange of payments in multiple currencies due on bilaterally netted, OTC credit default swap (CDS) contracts, enabling the credit derivatives market to realize straight-through processing of contract obligations from trade confirmation to settlement with virtually no manual intervention.

The TIW's central settlement service is linked to its lifecycle processing function. The TIW calculates quarterly coupons and captures other payments, such as upfront fees and credit event payments, due between counterparties of a transaction based upon legally binding records kept in the TIW Warehouse. Payments between counterparties are then netted on a bilateral basis prior to sending settlement instructions to DTCC's partner, CLS, for payment in multiple currencies.

Who Can Use the Service

The Central Settlement service is available to any firm that is a user of the TIW, either directly as a participant or through a participant as a correspondent firm. Authorized custodians and fund administrators can also be provided with access to accounts and modified reports by their participant customers.


The TIW's central settlement service:

  • Ensures timeliness and certainty of payments.
  • Increases efficiency by simplifying the settlement process.
  • Provides a full audit trail and link between trade confirmation and settlement, linking all bilateral nets back to the underlying gross payment cashflows and the associated trade record for each.
  • Enhances control and promotes greater certainty by providing advance notification to participants and settlement agents of their settlement amounts.

How the Service Works

Through a link with the TIW’s lifecycle processing functionality, DTCC provides continuous netting of Warehouse-generated payments and reporting of net and gross payment information to participants through the web interface or computer-to-computer connection. The service also bilaterally nets payments by customer account, currency and counterparty.

In accordance with established cutoff times, DTCC locks down net payment amounts. It then creates payment instructions for CLS-eligible accounts. CLS provides the TIW with real-time information on the status of the cash flow instructions submitted and sends TIW settlement amounts to CLS settlement members that settle on behalf of TIW participants. Funds are transferred between the parties through CLS in any of the following nine currencies, depending on the terms of the contract: Swiss franc, Euro, British pound, Japanese yen, U.S. dollar, Australian dollar, Canadian dollar, Hong Kong dollar and Singapore dollar.

Once settlement is completed, DTCC and CLS provide reports to TIW users and settlement members, respectively, and cash flows are marked "settled" in the Warehouse.

DTCC provides a series of search screens for TIW participants and central settlement participants to monitor and track both net and gross payments in detail, including both a 21-day cashflow report and a history capability. DTCC also provides customized reports to third-party providers such as custodian banks and CLS settlement members to assist in the tracking and reconciliation of the settlement amounts.

For More Information

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