Overview

DTCC Deriv/SERV automates matching and confirmation for a wide range of over-the-counter (OTC) derivatives products, including credit, equity and interest rate derivatives.

Specific instruments covered include single reference entity credit default swaps (CDS), CDS indices, CDS index tranches, equity index and share options, equity swaps and variance swaps, and interest rate swaps and swaptions. We regularly add new instruments to Deriv/SERV for matching and confirmation.

Deriv/SERV supports a wide range of trade events including new trades, full or partial terminations, assignments, increases, amendments and exits.

Deriv/SERV also offers bilateral payment matching and netting for credit default swaps.

Deriv/SERV's community of users includes all major global derivatives dealers, plus a rapidly growing number of investment managers and hedge funds from 30 countries.

Who can use the service

Global derivatives dealers and buy-side firms

Benefits

• Reduces Operational Risk that stems from unconfirmed trades and related documentation, by identifying and quickly resolving trading discrepancies.
• Greater Efficiency by centralizing, streamlining and automating the processing of trade confirmations.
• Increases Accuracy through electronic matching, which reduces the errors that can result from paper-based and manual data exchange.
• Lowers Operational Costs through automation, which eliminates the need for labor-intensive manual processing, allowing staff to focus on value-added responsibilities.

How the service works

Deriv/SERV uses Financial products Markup Language (FpMLTM) as its standard language.

Customers have the flexibility to connect to Deriv/SERV either through direct computer-to-computer real time messaging (through MQSeries), a spreadsheet upload capability via the Internet, or a Web-browser interface. Firms can also connect to Deriv/SERV through links with a variety of complementary service providers that have linkswith the service.

Global dealers and buy-side firms can automatically process OTC derivatives trade information via Deriv/SERV through the following options:

Matching: used by most firms, parties submit transaction details to DTCC Deriv/SERV using either computer-to-computer messaging or spreadsheet Internet upload. Connections over the Internet are secured via a digital certificate issued by DTCC Deriv/SERV and a high-security encryption connection.

DTCC Deriv/SERV automatically compares the stated terms of the transaction once details from both sides are received and provides each party with its status over a browser-based Internet screen. If the transaction fully matches, it is reported as a confirmed match. If there are fields that do not match, the system automatically reports them, allowing customers to view discrepancies in real time and submit new or enhanced data.

Affirmation: used primarily by lower volume and buy-side firms, parties view trades "alleged" against them on-line and either accept the trade details or suggest modifications. When modifications are suggested, Deriv/SERV automatically creates a new trade record, which both parties can re-examine against their original records, continuing to suggest modifications until the trade reaches "confirmed" status.

Fees

Dealers are charged "at cost" for their transactions and buy-side firms are not charged any fees to use the service.

For more information

For more information, please contact Deriv/SERV Relationship Management:
E-mail: derivserv_rms@dtcc.com
New York: +1 212 855 2027
London: +44 (0) 20 7650 1410