Interwoven, the owner of the Scrittura messaging technology that enables buy and sell-side clients to communicate details of OTC derivative transactions without manual processing, says its clients will now be among the first to have access to the full range of
post-trade processing services provided by the Depository Trust & Clearing Corporation (DTCC) through the Deriv/SERV Trade Information Warehouse the American CSD unveiled last month.
Interwoven’s upgraded Scrittura Messaging module will allow its buy and sell-side clients access to the full functionality of the Trade Information Warehouse, which the DTCC established as a secure, centralised global infrastructure for the post-trade processing of OTC derivatives.
The announcement comes as several industry bodies have expressed concern on the associated risk where OTC derivatives trades are not processed accurately and settled promptly and efficiently. The UK Financial Services Authority (FSA) originally issued a caution to market participants, which was followed by a report from the Counterparty Risk Management Policy Group, urging the market to address operational risk as a result of outstanding credit derivative confirmations. The US Federal Reserve subsequently called a meeting with top executives of the 14 leading banks to discuss concerns surrounding operational risk management practices.
Scrittura Messaging is embedded into Interwoven’s Scrittura Dealer and Scrittura BuySide solutions, and generates and validates trade confirmation messages for all OTC derivatives products, including DTCC messages for all product types such as credit, equity and interest rate derivatives. It produces and delivers electronic messages to trade matching bodies such as DTCC and also handles subsequent incoming responses, increasing automation and cost efficiency.
With this addition to the Scrittura product, customers will now be able to access the full range of post-trade processing tools available from the Trade Information Warehouse, which includes infrastructure to support processes such as payments, notional adjustments, contract term changes, trade matching, backload, TRI changes, and workflow updates for a variety of instruments, including credit default swaps, credit index swaps and credit index tranches.
“The warehouse has an open architecture allowing a range of complementary providers to offer services that enhance the value of our platform to our joint customers,” says Bill Hodgson, vice president, DTCC business development. “We continue to work with a number of third party firms to make connection to the warehouse easier for our mutual clients and to bring additional efficiencies to the OTC processing environment. DTCC’s Trade Information Warehouse is designed to better support the post-trade life-cycle for OTC derivatives, and the market as a whole. We welcome Interwoven’s initiative and look forward to extending the capabilities of the Warehouse in the coming year.”
Jos Stoop, vice president and general manager of financial services solutions at Interwoven, adds that Interwoven is pleased to offer system compatibility with the DTCC Deriv/SERV’s Trade Information Warehouse. “This additional functionality will encourage cost and risk reduction in the market and further assist our customers in achieving true straight-through-processing (STP) in their OTC derivatives trade processing systems,” says Stoop. “Interwoven continues to strive to reduce the risk of manual errors affecting OTC derivatives trades and allow our clients a greater ability to scale their business.”