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Trade Information Warehouse Expands Its Database, Adds New Functionality
by Melanie Best
DTCC Deriv/SERV’s Trade Information Warehouse, launched in November 2006, continues to roll out an expanding suite of services for the global over-the-counter (OTC) derivatives marketplace. At the same time, customers have been doing their part to populate the Warehouse’s database by entering trades that pre-date its launch.
The Warehouse is the market’s first and only comprehensive electronic platform for processing derivatives contracts, over their lifecycles, from initial confirmation through final settlement. It initially supports credit derivatives contracts but also will be able to support interest rate, equity and other OTC derivatives products as market demand grows.
Populating the Warehouse
A database of confirmed contracts constitutes the foundation of the Warehouse. Contracts that reside in it are known as “golden copies” and represent the primary record of the contract for both parties, taking precedence over any versions the counterparties retain in house.
Although new trades confirmed by Deriv/SERV automatically populate the database, transactions that pre-date the Warehouse must be re-matched and loaded into it. Thanks to the hard work by Deriv/SERV’s user community, most existing credit derivatives contracts have now been entered – or backloaded – into the database using a backloading software module. As of mid-2007, the backloading of interdealer contracts involving the market’s largest dealers – those referred to as the Fed 14 – is essentially 100% complete. Backloading among other dealers and the buyside is making good progress and expected to be finished during 2008.
The Warehouse inventory now exceeds 1.8 million contracts, a number that includes backloaded as well as newly confirmed transactions.
Steady expansion
With a robust database in place, the Deriv/SERV team has been building additional processing functions onto the Warehouse. Automated payment calculation was introduced early in the year. At mid-year, the processing of credit events began user testing, and slated for the fourth quarter is central settlement, a service Deriv/SERV is offering in partnership with CLS Bank International.
Meanwhile, transaction volumes for Deriv/SERV’s basic matching and confirmation service for credit, rate and equity derivatives keep rising. In the first six months of 2007, volumes doubled over the same 2006 period. @