The partnership is to develop a multi-functional collateral processing platform for the OTC derivative market to bring the better transparency and reduce operational risk associated with processing bilateral collateral agreements.
Starting later in the first quarter of 2011, the MarkitSERV portal will provide clients with integrated access to the AcadiaSoft Messaging Platform, an online service that facilitates and manages communications required for collateral calls.
The new service will enable buy- and sell-side counterparties to manage information electronically on exposures, commitments and adjustments to collateral and create an audit trail of all communication about margining.
To the extent messages about collateral are used to meet the collateral and related reporting requirements under the Dodd-Frank Act, they can be processed through DTCC’s Trade Information Warehouse facilities and regulatory reporting interface.
MarkitSERV CEO Jeff Gooch said clients are searching for ways to streamline the multiple post-trade requirements relating to derivatives transactions.
"By linking AcadiaSoft’s technology and DTCC’s capabilities to MarkitSERV, we provide our clients with a single comprehensive platform to manage collateral alongside trade processing workflow, portfolio reconciliation and valuations," Gooch said.
DTCC derivatives services and product development managing director Peter Axilrod said this alliance leverages the organizations’ expertise in providing market participants with the first component required for straight-through-processing for collateral.
The total value of collateral circulated in the OTC derivatives market was estimated at $3.2 trillion at the end of 2009 versus $200 billion in 1999, according to the International Swaps and Derivatives Association.
