The Depository Trust & Clearing Corporation will roll out a matching and confirmation service for interest rate swaps and swaptions next month and plans to expand its equity derivatives confirmation service to include total return and variance swaps by spring. Peter Axilrod, a managing director in the DTCC's new business development division in New York, said it is also working to develop its services in payment processing, payment calculation, portfolio reconciliation and trade confirmation.
"We will be rolling out shortly a second generation payment processing service for all credit-default swaps and we plan to extend that to all over-the-counter derivatives," Axilrod said. In addition, he said the service would be extended beyond current cash flow matching and netting to allow settlement. "Once payments are reconciled and netted, customers can go straight through to settlement through a multi-currency settlement platform," he said, adding he was unsure which platform would be used. DTCC hopes to kick off this service for the June CDS payments and plans to ultimately cover any derivative with repeatable payments.
DTCC also hopes to develop a payment calculation feature by year-end to improve the current system in which firms calculate their own payments and the DTCC matches them. Axilrod said clients were demanding the DTCC provide a portfolio reconciliation service for all deals, especially those subject to collateralization. He said this service would support mark-to-market reconciliation and margining and would also extend to all products with repeatable payments.
