DTCC Connection

Jun 01, 2010 • DTCC Connection

DTCC Posts Data That the Industry Will Use to Increase Clearing of Credit Derivatives

by Judy Inosanto


DTCC posted on its website data compiled from credit default swap (CDS) trades registered in DTCC’s Warehouse Trust Company LLC at the request of market participants who will use it to assess which of the various single- reference entities might have sufficient liquidity to be cleared through a central counterparty (CCP).


The information includes market activity from June 20, 2009, through March 19, 2010, for all single-name CDS reference entities.


Market participants requested the data in keeping with the commitments they made (in their March 1, 2010, letter) to global regulators to continue strengthening the operational infrastructure and mitigating risk in OTC derivatives trading. As part of this commitment, the signatories (including representatives of all major dealers, several buyside firms and industry trade associations) pledged to increase the range of products eligible for CCP clearing. The requested data was posted on DTCC’s website to ensure that other market participants, interested parties and the public have equal access to the information.


While DTCC compiled and provided the basic data requested by industry firms, the analysis of the data and subsequent assessment of which reference entities might be best suited for clearing will be conducted by market participants, including various members of the Credit Derivatives Steering Committee of the International Swaps and Derivatives Association (ISDA®), as well as the relevant CCPs.


DTCC’s Trade Information Warehouse is the centralized global repository and post-trade processing infrastructure for the worldwide OTC credit derivatives market. Virtually all CDS trades are registered in the Warehouse, which is operated by the Warehouse Trust Company LLC, a DTCC subsidiary regulated by the New York State Banking Department and a member of the Federal Reserve System. Warehouse customers include all major derivatives dealers and more than 1,700 buyside firms and other market participants located in nearly 60 countries. As of May 21, the total gross notional value of the approximately 2.3 million CDS contracts registered in the Warehouse was $25.1 trillion.


DTCC also publicly releases weekly aggregate information on OTC credit derivatives, including open interest and turnover information for the top 1,000 names traded worldwide and CDS indices, which is available on its website at www.dtcc.com. This information is posted Tuesday evenings after 5:00 p.m. ET. @


dtccdotcom