The Depository Trust & Clearing Corporation (DTCC), a US financial services company providing clearing and settlement services to financial markets, is testing a new version of its platform based on a distributed ledger technology (DLT).
In the US, the DTCC regulates the majority of securities transactions, for a total value of about 1.7 trillion dollars.
For some time now, it has been carrying out a project to revise its platform for Trade Information Warehouse (TIW) derivatives and bring it to the cloud and DLT, along with 15 of the world’s largest banks.
Currently, TIW manages the records, life cycle events and payments of offset and bilateral credit derivatives for over $11 trillion.
The project began in 2017 with IBM, Axoni and the R3 consortium, to renew the management platform for processing and post-trading derivative contracts, moving it to a distributed accounting system, to lower costs and eliminate the need for
“Disjointed, redundant processing capabilities and the associated reconciliation costs“.
The standardized nature of process flows and data models make credit derivatives an ideal case for testing DLT-based distributed accounting solutions. The DLT-based TIW service will enable the industry to process and report to regulators with the same data flow.
15 large banks are ready to conduct the first end-to-end user acceptance tests, working with simulated use cases and test data to validate the interaction between systems, businesses and other major market infrastructure providers, including MarkitServ and the new credit platform, TradeServ.
The tests will be completed by the first quarter of next year and, if passed, other market participants will be invited to participate. The platform could, therefore, be fully operational by the end of 2019.
Chris Childs, CEO of DTCC DerivServ, said:
“The transformation of DTCC’s Trade Information Warehouse using distributed ledger and cloud technology, along with the modernization of MarkitServ’s confirmation system, is truly a ground-breaking effort pushing the boundaries of technology use in the industry“.
Lee Braine, Chief Technology Office, Barclays, added,
“We are pleased to be working with DTCC, our partners and colleagues on this exciting project to bring distributed ledger technology to life in a demonstrable way that will enhance efficiencies and lower costs and risks for the industry“.
