Four of the largest OTC derivatives clearing brokers have confirmed their support for the Clearing Connectivity Standard (CCS) initiative to standardise reporting for cleared OTC derivatives.
As part of the Dodd-Frank Act of 2010, the US Commodity Futures Trading Commission (CFTC) has mandated certain OTC derivative products be centrally cleared; giving 10 June 2013 as the second of three mandated clearing implementation dates.
Custodian banks BNY Mellon, J.P. Morgan, Northern Trust and State Street have previously supported the CCS standard to satisfy reporting requirements.
Now, Bank of America Merrill Lynch, Barclays, J.P. Morgan and UBS have all announced their support for the new derivatives reporting standard.
The standard is expected to be used by the clearing broker community to transmit information about cleared OTC derivatives trades and margins to their asset manager clients, custodians and service providers.
Ray Kahn, head of OTC clearing at Barclays, said: “The CCS format will simplify and align margin and portfolio reconciliation process. We’re pleased to join the core group of market participants in supporting and adopting this standard, as we see it as a solution that will help to drive post trade efficiencies for our clients.”
“As the industry moves to implement mandatory clearing, the absence of a formal standard for formatting and transmitting margin and position data was a significant hurdle to achieving efficient and cost effective connectivity between market participants,” said Andres Choussy, global co-head of OTC clearing at J.P. Morgan.
“We are pleased that this industry collaboration has successfully produced this standard as this will facilitate operating in the new market environment.”
CCS provides standardised connectivity and reporting for central counterparty-eligible interest rate and credit default swap products through LCH.Clearnet, the CME Group, and Intercontinental Exchange.
The International Swaps and Derivatives Association CCS steering committee is working with futures commission merchants (FCMs) and custodians to include additional products, participants, and geographies.
