Swift's securities efforts boosted by DTCC link

Swift's securities efforts boosted by DTCC link

Swift's efforts to extend its franchise further into the securities market have received a boost with the creation of a link between the SwiftNet IP messaging platform and the Deriv/Serv over-the-counter (OTC) derivatives matching and confirmation service from New York's Depository Trust and Clearing Corporation (DTCC).

The link between the two services allows Swiftnet users to deliver real-time, transaction data to DTCC Deriv/SERV for matching and confirmation without having to create a separate, direct computer-to-computer connection to DTCC.

DTCC Deriv/Serv provides automated matching and confirmation for a wide range of credit, interest rate and equity derivatives products. Its global customer base includes over 640 dealers and buy-side firms in more than 25 countries worldwide.

Peter Axilrod, managing director, DTCC business development, comments: "Our collaboration with Swift expands the options available to buy- and sell-side firms to transmit real-time data to Deriv/Serv."

The hook-up to Deriv/Serv provides a welcome boost to the Brussels-based co-operative as it seeks to regain traction in the securities business. Speaking at a press conference at Sibos in Sydney yesterday, Swift CEO Lenny Schrank admitted that the company still has more to do to win over investment managers in particular.

To that end, Swift is mid-way through a thoroughgoing re-structuring of its securities industry division under head James Donovan (pictured). Six new divisions are being created to cater directly for the needs of distinct industry segments, including custodians, broker dealers, market infrastructures and investment managers, funds and treasury. The Society is also looking to hire professionals from the industry to take critical leadership roles in the new structure.

The need for improved automation in the securities business, and the OTC markets in particular, has been emphasised by the results of a recent JPMorgan poll of 20 asset managers and institutional investors who cited data management and systems infrastructure issues as the biggest challenges they faced. Three quarters of respondents said that their current infrastructure provided limited and insufficient support for the pricing and processing of derivatives.

Kirit Bhatia, global head of securities collateral management at JPMorgan, notes: "While asset managers and institutional investors are increasingly using OTC derivatives for a variety of investment reasons, many are not equipped for the associated processing challenges. The snapshot provided by these poll results supports what we are hearing through our ongoing dialogue with our wider client base and the market."

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