The Trade Information Warehouse (Warehouse) is the market’s first and only centralized global repository for trade reporting and post-trade processing of OTC credit derivatives contracts.

What is the Trade Information Warehouse?

The Warehouse comprises a robust infrastructure that provides market participants across the globe with a wide range of automated operational capabilities. It also offers tailored solutions that allow customers and third-party service providers to subscribe to the relevant service that meets their specific needs. The Warehouse comprises a:

Trade Reporting Repository that operates and maintains the centralized global electronic database for virtually all CDS contracts outstanding in the marketplace. The repository maintains the most current credit default swap (CDS) contract details on the official legal, or gold record, for both cleared and bilateral CDS transactions.

The repository also stores key information on market participants single-sided, non-legally binding, (referred to as “copper” records), CDS transactions to help regulators and market participants gain a clearer and more complete snapshot of the market’s overall risk exposure to OTC credit derivatives instruments.

DTCC also provides weekly reports on its website, www. dtcc.com, on current and historical data on the notional amounts of contracts outstanding and contract turnover on “gold” records. Reporting on Copper records is provided only to regulators coincident with their authority.

In establishing the Warehouse Trust Company as a regulated entity, our aim is to ensure that regulators, wherever they are located, have unfettered access to the information they need to assess risk exposure in the global market, and that industry participants have the assurance of that regulatory oversight over the critical infrastructure that supports the market activities.

Lifecycle Event Processing provides a wide array of automated services for recorded contracts, including:

• Payment calculation and bilateral netting: The Warehouse calculates payments on all “gold calc” confirmed CDS contracts and creates real-time bilateral nets for each currency.
• Event processing: The Warehouse provides a comprehensive electronic service that automates lifecycle processing for successor events such as reorganizations and renaming of corporate entities and credit events such as bankruptcies, restructurings and insolvencies. As of December 30, 2009, DTCC seamlessly completed processing for 50 credit events this year including the General Motors bankruptcy, reported as the largest in industrial history. The Warehouse also successfully completed one active restructuring event and 129 successor events so far this year.
• Central Settlement: In partnership with CLS Bank International, DTCC provides central, automated settlement of payments for contracts processed through the Warehouse’s Central Settlement service.

Who can use the service?

The Warehouse’s customer base includes all major global derivatives dealers and more than 1700 buyside firms and other market participants located in 52 countries. The Warehouse facilitates processing for third party solution providers such as central counterparties, portfolio compression and custodian banks.

Benefits

Increases market transparency by providing public and regulatory reporting to ensure that risk can be viewed from a central vantage point through a global repository.

Reduces operational risk and increases efficiency by automating and centralizing the maintenance of position data and supporting a range of post-trade processing requirements from a single location.

Promotes accuracy and comprehensiveness based on the most current position records, and facilitates tracking of payment flows between firms.

Helps firms simplify management of credit events by eliminating ad hoc reconciliation and supporting International Swaps and Derivatives Association’s (ISDA) Big Bang and Small Bang protocols.

Cost savings

Standardizes and automates post-trade processing of payments and events over a contract’s life.

Reduces the number of cash movements by streamlining the payment process for bilateral contracts through the Warehouse’s central settlement service. The service significantly reduces operating risks for users by replacing manually processed bilateral payments with automated, netted payments.

Increases efficiency of portfolio management tools and processes.

For more information

Please visit www.dtcc.com.