As DTCC prepares to move its Trade Information Warehouse (TIW) for credit derivatives swap management to a distributed ledger technology (DLT) platform, the post-trade clearing and settlement services organization expects the change to enable more comparisons of transaction information, according to Jennifer Peve, executive director, office of fintech strategy at DTCC.
“Comparability is certainly helpful. We’re not creating a new business from scratch,” she says. “There are a number of use cases out there being explored, where the distributed ledger certainly can be a good fit because it’s creating efficiencies like taking away duplicative processes or adding value to the clients. Or it’s creating a single source of truth on the transaction and sharing that across a number of participants. It can be applied even to businesses that don’t have an exact comparison.”
TIW has design principles in common with DLT, in that both centralize the collection of transaction information on a ledger using standardized protocols, for transparency, according to Peve. “The standardized protocols and data models around credit derivatives that came out when we originally developed the TIW lent themselves nicely to putting on a distributed ledger,” she says. “Anything you put on a distributed ledger should be part of your business case so you understand the standardization of the asset.”
DTCC partnered with IBM, Axioni and R3 to build the DLT framework to which TIW will be moved. TIW processes trade lifecycle events for 98% of all credit derivatives transactions worldwide, and supports processing for central counterparties and custodian banks.
On a separate project, DTCC and software company Digital Asset Holdings is beginning the second phase of planning a DLT-based service to clear and settle US Treasury, agency and agency mortgage-backed repo transactions. The work began in March 2016, and the second phase includes creation of a Stakeholder Working Group comprised of market participants to collect feedback on the plans for the service. Based on feedback collected by June, DTCC and Digital Assets will then consider how to develop the service.