Omgeo links with DerivServ to create single window post-trade system

05 May 2006 | 6453 views | 0 Tablet Computer Screen

Post-trade processing hub Omgeo is to provide an automated interface to the Depository Trust and Clearing Corporation's (DTCC) DerivServ platform in an effort to provide a single window ASP-based system for investment managers to settle multiple exchange-traded and OTC instruments.

Omgeo - a joint venture between the DTCC and Thomson Financial - says the link will enable investment manager subscribers to the Connect platform to integrate their domestic and cross-border trade processing for OTC derivatives with that for fixed income, equities and other instruments.

The vendor says users will benefit from streamlined trade and settlement management, eliminating the need to maintain multiple systems and services.

The connection between the two services is expected to go live this quarter.

DTCC DerivServ automates the matching and confirmation of a wide range of OTC derivatives products and also automates payment matching and bilateral netting of credit default swaps. The Depository claims that some 400 dealing firms use the platform to electronically process over 60 percent of the total trades in the $17.3 trillion credit default swaps market.

In linking the two services, Omgeo Connect will extend its XML message specification to capture the data relevant to OTC derivatives, transform this data into industry standard FpML messages, and route these messages to DTCC DerivServ via an MQ interface. Post matching, Omgeo Connect will receive status messages from DTCC DerivServ, transform these messages, and pass them back to the investment manager via their Omgeo Connect interface.

Steve Matthews, managing director, product and business development at Omgeo, says the link-up with DerivServ is "the first of many planned for Omgeo Connect and is a significant step forward in Omgeo’s strategy to quickly bring to market streamlined solutions that address the challenges of processing trades across multiple asset classes."

He says Omgeo is also working with DTCC to create a lightweight, file-based, automated solution that can provide investment managers with a real-time direct interface to their derivatives processing without significant development costs. The new interface is expected to be available later this year and should enable users to better manage block trades, allocations and confirmations says Matthews.