The American CSD, the Depository Trust and Clearing Corporation (DTCC), says its Deriv/SERV OTC derivatives order routing and matching business has had a record year, with transaction volume tripling in 2006. As a result,
DTCC is providing a first-time rebate of $3 million to its dealer customers.
The CSD says Deriv/SERV processed a record 2.6 million in transaction volume in 2006, a nearly three-fold increase from the 945,000 handled in 2005. It also increased matching and confirmation rates for credit derivatives trades (i.e. credit default swaps) to more than 80% in 2006 up from 15% in 2004 through Deriv/SERV. This increase has played a par in allaying regulators’ concerns about improving efficiency and managing risk in the marketplace.
The Deriv/SERV customer base now numbers 753 global derivatives dealers
and buy-side firms, up from 207 the previous year.
DTCC now claims to own the largest community of users for post-trade processing in the OTC derivatives market. It includes all major derivatives dealers and a rapidly growing number of investment managers and hedge funds in 30 countries.
During the last year, the Deriv/SERV service was expanded to include additional OTC credit, interest rate and equity derivative products.
DTCC also launched the Trade Information Warehouse to provide an automated central repository for tracking OTC derivatives contracts over their life cycle, which can extend for years.