ISDA vows to develop clearing connectivity standard for global markets

25 October 2012

The International Swaps and Derivatives Association (ISDA) has said that it will support the development and adoption of the Clearing Connectivity Standard (CCS), an industry standard that seeks to improve over-the-counter (OTC) derivatives reporting and communication for asset managers, futures commission merchants (FCMs), central counterparties (CCPs) and custodians.

The ISDA trade body said that to further the development of the standard it will work with Sapient Global Markets, which initially developed the CCS in collaboration with the largest custodian banks and leading FCMs, to provide programme management, governance and industry oversight.

The CCS, a standardised connectivity format, will simplify integration with data systems and automate reconciliation in order to improve the communication and reporting of cleared OTC derivatives trades. The standard can be used by the FCM community to transmit OTC clearing-related information on behalf of their asset manager clients to custodians.

CCS currently provides for standardised connectivity and reporting initially for central counterparty-eligible interest rate and credit default swap (CDS) products in the US through LCH Clearnet’s SwapClear and the CME Group. ISDA and Sapient are working on a plan to expand the service to include further products, participants and geographies over the next year. The intent is to broaden the range of participants to include additional FCMs, custodians, asset managers and CCPs.

Future enhancements to the CCS will also include a conversion of the standard to Financial products Markup Language (FpML) under the guidance of FpML working groups. FpML is the industry data standard for OTC derivatives and complex products, with the initial version of the standard having been adopted by a group of participants representing more than 12 firms and multiple end-users in the buy-side trading community.

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