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  • Deriv/SERV LLC

  • DTCC Spells Out Policy for Releasing CDS Data to Global Regulators

  • DTCC’s central trade repository, the Trade Information Warehouse, is the market’s first and only comprehensive trade database and centralized electronic infrastructure for post-trade processing of OTC derivatives contracts over their five-year lifecycles, from confirmation through to final settlement.

    Established in 2006, in collaboration with members of the OTC derivatives industry and regulators, DTCC’s trade repository now has a global customer base that includes all the major credit derivatives dealers and more than 1,700 buyside firms in 52 countries.

    DTCC’s repository holds all underlying position data on contracts, and once in the Warehouse, the trades can be fully serviced, including automatic netting and calculation of all payments obligations as well as central settlement of these payments in multiple currencies; restructuring or other organizational changes; full or partial terminations of contracts; novation (the assignment of contracts to other trading firms prior to the contract’s end), portfolio compression and the management of credit events.

    During 2009, DTCC supported the processing and recordkeeping of more than 2.2 million CDS contracts, worth more than US$25.1 trillion (€17.5 trillion), helping to reduce risk in the market. In addition, the Warehouse seamlessly managed a record-breaking 50 credit events, with a gross value of US$386 billion, including the General Motors bankruptcy in April, the largest in U.S. industrial history. The Warehouse also managed 129 successor events caused by restructurings, and processed 11 million gross payments amounts in nine currencies through its central settlement service.

    Warehouse Trust Company

    In March 2010, DTCC established the Warehouse Trust Company LLC, a DTCC subsidiary that is a member of the Federal Reserve System and the New York State Banking Department, to operate the Trade Information Warehouse for OTC credit derivatives. Its regulation is an important step forward in furthering regulatory and industry objectives to bring greater transparency and added risk mitigation to the global OTC credit derivatives market.

    While the Warehouse Trust will be directly regulated by the Federal Reserve and the New York State Banking Department, it is also expected to be subject to a global cooperative oversight framework involving other U.S. and non-U.S. regulators. DTCC fully supports such a cooperative oversight framework and embraces the concept of regulatory harmonization across borders. @