DTCC Connection

Oct 03, 2011 • DTCC Connection

Testing Begins for New Equity Post-Trade Risk Management Service

by Bari Trontz


DTCC has launched customer testing for DTCC Trade Risk ProSM, a new post-trade risk monitoring service that will help clearing firms manage exposure on their correspondents’ and their own equity trading activity. The four-week testing period ends November 10, 2011, after which Trade Risk Pro will enter a pilot phase later in November, subject to regulatory approval. The service is anticipated to launch in January 2012.


Trade Risk Pro is a web-based service that provides DTCC members with a continuously updated snapshot of their equity trading activities. It is designed to help clearing firms easily monitor and set equity trading credit limits in order to mitigate risk. It will be the only service in the U.S. marketplace that offers a single, centralized view of all U.S. equity trades submitted for clearance.


“Trade Risk Pro gives the industry an early warning system that alerts clearing firms to trading activity that is nearing the credit limits they have set for their own and their correspondents’ accounts, enabling them to effectively manage potential risk,” said Murray Pozmanter, DTCC managing director and general manager, Clearing Services. “DTCC is committed to bringing its members innovative tools that address the industry’s needs for managing systemic and other risks.”


The service will source its data from NSCC, which combines virtually all broker-to-broker equity, listed corporate and municipal bond and unit investment trust trading in the U.S.


Testing it out

Firms participating in the test include some of DTCC’s largest member firms, as well as broker/dealers that typically handle lower trading volumes. These firms played an integral role in the design of Trade Risk Pro by providing DTCC with insight into the unique and unmet needs of the various participants in the U.S. equity marketplace.


During the testing period, participants will utilize the system as if it were live, which will allow them to become familiar with Trade Risk Pro’s visual design; learn how to navigate the web-based portal; and submit their user criteria, which will serve as the foundation of their monitoring.


Customers that participate in the testing period will be able to retain their custom settings and continue monitoring into the pilot and launch phases.@


[To learn more about Trade Risk Pro, contact Bonnie Bowes at 212.855.8024 or bbowes@dtcc.com.]


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