DTCC begins testing DLT platform for credit derivatives

The Depository Trust & Clearing Corporation (DTCC) is ploughing ahead with its project to re-platform its credit derivatives Trade Information Warehouse (TIW) on distributed ledger technology and cloud, enlisting 15 of the world’s largest banks for a testing phase.

The TIW service automates the record keeping, lifecycle events, and payment management for more than $11 trillion of cleared and bilateral credit derivatives.

In early 2017, the DTCC called in IBM, Axoni and blockchain consortium R3, to overhaul the platform to handle post-trade processing of derivatives contracts over a distributed ledger framework, slashing costs by eliminating the need for “disjointed, redundant processing capabilities and the associated reconciliation costs”.

Nearly two years on, the 15 banks are ready to conduct end-to-end, structured user acceptance tests, working with simulated use cases and test data and validating the interaction between systems, firms and other key market infrastructure providers, including MarkitServ and its new platform for credit, TradeServ.

Assuming all goes well, other market players will be invited to join open testing, which will be completed by the first quarter of next year, after which the system should go live.

Chris Childs, CEO, DTCC DerivServ, says: “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, adds: “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.”