Deriv/SERV has established itself as the only platform used by virtually all major global derivatives dealers to electronically match and confirm over-the-counter (OTC) credit derivatives, interest rate derivatives and equity derivatives.

Already the de facto standard for automated processing of OTC credit derivatives, Deriv/SERV is gaining support for processing an expanded range of OTC interest rates and equity products, from both global dealers and buy-side participants.

"With volumes of OTC derivatives instruments expanding in the marketplace at a rapid pace and new products entering the financial arena with much greater frequency, automated services such as Deriv/SERV have become essential tools for both the dealer community and buy-side firms to remain efficient, said Ric Okun, senior vice president, PIMCO. "Deriv/SERV has been incredibly responsive to meet these recent demands ensuring market standards are applied uniformly through its highly transparent platform.

New product additions
New equity products that were added to the service in April include Asia Ex-Japan (AEJ) share and index options; AEJ share and index swaps; and Japan share and index variance swaps. These additions further expand Deriv/SERV's equity coverage, which already included the major North American and European share and index options, swaps, variance swaps, as well as Japan share and index options.

DTCC expects to be able to support by year-end virtually all major equity products for which there are International Swaps and Derivatives Association (ISDA®) standard Master Confirmation Agreements (MCAs).

Automated support for ISDA's new and revised definitions of the standard rates and reference terms for interest rates swaps transactions were also added to Deriv/SERV last month. Deriv/SERV matches and confirms a broad range of swaps and swaptions as well as all post-trade events for interest rates.

New credit products recently added to the service include credit default swaps (CDS) on single-named asset-backed securities and CDS on loans. Deriv/SERV currently supports the complete universe of credit derivatives products and post-trade events for which there are standard ISDA MCAs.

Industry as catalyst
"Collaborating with the dealer and buy-side community, DTCC is serving as a catalyst for large-scale automation for OTC derivatives processing, said Peter Axilrod, DTCC managing director, Business Development. "In the past three years, the industry's commitment to improve efficiency and reduce operational risk has only grown as we further develop the Trade Information Warehouse with CLS, our central settlement partner, and expand the depth and breadth of the Deriv/SERV family of services.

Deriv/SERV has the largest community of users for automated post-trade processing in the marketplace, with more than 800 dealer and buy-side customers in 30 countries. Broader dealer usage of the service along with these product additions allows Deriv/SERV's buy-side customers the ability to match and confirm a comprehensive range of OTC derivatives instruments and post-trade events on a single platform.

Global derivatives dealers and buy-side firms worldwide attribute to Deriv/SERV a key role in increasing automated processing rates, which contributes to minimizing operational risk and strengthening the market's infrastructure. This helped market participants achieve an 80% reduction in the backlog of unconfirmed credit derivatives trades in the market by June 2006 - a major commitment made by the leading dealers to global regulators.

Populating the Warehouse
"Adding a broader group of OTC derivatives products to the matching and confirmation service makes our overall platform more robust as it will allow our customers to populate the Trade Information Warehouse with even more confirmed contracts, said Janet Wynn, DTCC managing director and general manager, Deriv/SERV. "This is especially beneficial as we look to move the Warehouse's functionality beyond credit derivatives.

The Warehouse is designed to extend to other OTC derivatives products including interest rates, equities and commodities. @

[ISDA® is a trademark of The Inter-national Swaps and Derivatives Association.]