DTCC said the new CCP is designed to reduce risk and costs in the $100 trillion a year market for US mortgage-backed securities (MBS).
The MBS division of DTCC’s Fixed Income Clearing Corp. will begin acting as a CCP from 2 April 2012.
The unit as a CCP will guarantee settlement of all matched MBS trades which often do not settle until months after the trade.
DTCC president and CEO Donald Donahue said that this is the first CCP to be created in US cash markets in more than a quarter of a century.
"We expect it will greatly reduce risk by offering pool netting services and streamlining the settlement of mortgage-backed securities trades," Donahue said.
