DTCC Connection

Oct 01, 2010 • DTCC Connection

Trade Information Warehouse Enhances Functionality for Restructurings

by Judy Inosanto


DTCC’s Trade Information Warehouse has extended its lifecycle event processing capability, adding a central electronic solution for restructuring credit events, which takes place when an underlying bond issue is modified or restructured.


“The new functionality will give market participants greater efficiency, flexibility and control mechanisms for processing restructuring credit events,” said Marisol Collazo, vice president, Product Management, DTCC Deriv/SERV


“This new functionality will enable participants, including central clearinghouses, to timely exercise triggers on Warehouse records and meet the required notification period under the ISDA ‘Small Bang’ protocol.


Additionally, it will significantly reduce the manual intervention that was previously required in managing this type of activity in the Warehouse, thus delivering a greater degree of risk mitigation, certainty and accuracy to these transactions.”


The new capabilities went live October 1.


The functionality will bring increased automation and centralization to managing restructuring events. It will:


  • Incorporate automatically the ISDA “Small Bang” protocol for triggering the deadlines and rules related to a restructuring that affects a specific CDS reference entity.
  • Give market participants a centralized master record that will contain and report on the applicable deadlines and processing dates throughout the lifecycle of the event.
  • Provide regular reporting on message activity and the impact on a transaction when a restructuring event is triggered.
  • Introduce a new MQ messaging capability, spreadsheet uploads and a unilateral messaging solution for individual transactions that are affected by a triggered restructuring event.
  • Provide a new dashboard specifically for restructuring to ensure market participants have access to the population of CDS trades affected by the event and the information and applications they need to process restructured transactions.
  • Provide a unified restructuring processing solution for all legally confirmed or “gold” Warehouse transactions that have cleared with a clearing house.
  • Allow clearing houses to pre-advise the Warehouse of transactions that have been matched and cleared that are affected by the triggering of a restructuring event.
  • Link the restructuring event to the trade position and affect the post-trade lifecycle processing following the auction which includes the cash-flow processing and settlement required between counterparties. @

[For more information on the Warehouse’s enhanced restructuring events service, contact TIWLifecycle@dtcc.com.]


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