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DTCC'S Credit Default Swaps Automated Confirmation Service Goes Live With Nine Users

New York, November 24, 2003 - Nine of the largest dealers in credit default swaps worldwide are now using the automated trade confirmation service developed by The Depository Trust & Clearing Corporation (DTCC) to confirm trades.

DTCC's service was the first to automate the confirmation of credit default swaps.  Virtually all standard credit default swap transactions can be accommodated by DTCC's service, and it is being used on a global basis by market participants. 

Among the nine dealers now live on the service are:  Bear Stearns, BNP Paribas, Citigroup, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and UBS.  Thirteen global dealers have signed up to use the credit default matching service developed by DTCC, and the remaining four firms are scheduled to go into live production in the very near future.

"It is unusual for a new service to obtain, at launch, the participation of dealers having such a large percentage of the trading volume," said Sal Naro, global head of credit trading for UBS.  "It speaks well for the community's ability to mobilize in order to address industry needs."

"We are very happy to be live on the service," said Andy Brindle, managing director, JPMorgan Chase.  "We are planning to submit all eligible credit default swap trades with other participants to DTCC's service for automated confirmation."

"Having a single, centralized trade confirmation utility used by a critical mass of dealers, including virtually all of the very largest dealers, will be of great benefit to us," said Jonathan Dorfman, managing director, Morgan Stanley.  "It will be a major factor in facilitating the growth of this market." 

"We have been live on DTCC for three weeks now, and it is really effective in improving confirmation turnover," said Pierre Mathieu, head of Europe flow credit trading at BNP Paribas.

Mark Beeston, chief operating officer of Integrated Credit Trading, Deutsche Bank, echoed these sentiments, saying, "Automating the confirmation of credit default swaps is key to the continued growth of this market.  We look forward to making extensive use of this service."

"Now that the market has largely addressed the issues of documenting credit derivative transactions, having an automated procedure for actually executing the confirmations is the next logical step in the continued growth of the market. We are delighted to be part of this initiative," added Mark Davies, head of Global Credit Derivatives Trading at Bear Stearns.

"As one of the leaders of the initial effort, we feel the DTCC initiative represents an important evolution in the credit derivatives market.  By making trades easier to confirm and settle, default swaps will become increasingly fungible with corporate bonds," said Sumit Roy, head of Credit Derivatives Trading at Citigroup.

Lance Uggla, CEO of Mark-It Partners, a well-known provider of pricing and reference data for the credit default swap market, including most of the dealers using the DTCC service, noted, " The speed and take-up by the dealing community in the DTCC service was unexpectedly quick and an indication of the need.  The whole process was completed in a matter of months, and I expect the number of users to rise very quickly."

DTCC's service is fully integrated with Mark-It Partners' reference entity data (RED) service and supports the use of such data in the trade confirmation process.

"In addition to the dealers who have signed subscription agreements with us, a number of large hedge funds and other buy-side organizations have indicated to us their intention to use the service as soon as practicable after the bulk of the dealers are live," said Peter Axilrod, DTCC's managing director, Business Development.  "We are now in the process of getting them connected and tested."

Janet Wynn, managing director and general manager for DTCC's OTC Derivatives business area, noted that DTCC is embarking on an ambitious agenda in 2004, including the capability to do assignments and partial terminations as its first major enhancement to the credit default swaps matching service.  "The timing is expected to be shortly after the initial use of the service by the bulk of the major buy-side firms, who do most of the assigning," Wynn said.  "In early 2004, DTCC will be announcing plans to expand confirmation services to additional OTC derivative products and provision of new services for our entire community."

The credit default swap product is one of the fastest growing of the hundred-trillion dollar over-the-counter derivatives market, doubling in size from 2000 to 2002 and projected to more than double in size again from 2002 to 2004, according to a recent British Bankers Association survey.  DTCC's new matching service will, for the first time, bring automation, standardization and greater certainty to this market.  The service will be provided by DTCC Deriv/SERV LLC, a newly formed subsidiary of DTCC.

About DTCC

The Depository Trust & Clearing Corporation (DTCC), through its subsidiaries, provides clearance, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, over-the-counter credit derivatives and emerging market debt.  DTCC's depository also provides custody and asset servicing for more than two million securities issues from the United States and 100 other countries and territories. In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with their distribution networks. DTCC has operating facilities in multiple locations in the United States and overseas.  For more information on DTCC, visit www.dtcc.com.