Over 1300 funds link to DTCC reconciliation service

Source: Depository Trust & Clearing Corporation

The Depository Trust & Clearing Corporation (DTCC) today announced that more than 1,300 investment funds participating in the syndicated loan market and administered by more than 80 leading fund managers are now linked to its Loan/SERV Reconciliation Service.

DTCC's Loan/SERV Reconciliation Service, one of an evolving suite of services that helps automate and streamline the processing of syndicated commercial loans, enables agent banks and lenders - in this case, funds - to track, view and reconcile loan positions on a daily basis. The service, already in full production with leading global banks such as J.P. Morgan, Citi and Deutsche Bank, provides information on more than 75,000 loan positions.

In recent weeks, leading investment firms that have linked their funds to the Loan/SERV Reconciliation Service include PIMCO, Oak Hill Advisors, Highland Capital Management and KKR.

"Leading global investment management firms realize they need to make sure their loan positions are on the same page as the agent banks to ensure the accurate and timely servicing of these loans," said Chris Childs, DTCC vice president, Global Loans Product Management. "Loan/SERV provides this data access in real time. By linking to Loan/SERV, these fund managers are introducing cost savings, boosting efficiencies and providing greater transparency in the syndicated loan market.

"More and more investment firms realize the benefits that come with this automation, and it's why we've seen such a dramatic jump in the number of funds linking to the Reconciliation Service. In the past month alone, more than 25 fund managers signed up for the service," Childs said.

Cash Settlement Capabilities Will Help Reduce Risk

In June, DTCC announced that its Loan/SERV advisory committee endorsed plans to add cash settlement capabilities, including Delivery versus Payment (DVP), to its Loan/SERV suite of services. A timetable for testing and production will be issued shortly. The advisory committee includes the Bank of New York Mellon, Barclays Capital, Citi, Deutsche Bank, J.P. Morgan, and the Royal Bank of Scotland, all agent banks serving the syndicated loan market.

"Our multi-currency DVP service, coupled with the e Loan/SERV Reconciliation Service, will dramatically reduce risk and provide greater certainty in the syndicated loan market," said Childs. "DVP will provide certainty to loan traders that cash settles simultaneously with changes to asset ownership recorded by agent banks."

Along with its Reconciliation Service, DTCC introduced its Loan/SERV Messaging Service in 2008, which provides a safe and automated network for the transmission, receipt and online storage of industry-standard loan messages.

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