The Government Securities Clearing Corporation (GSCC) and The Depository Trust & Clearing Corporation (DTCC) have issued proposals for a real-time trade matching (RTTM) system for US corporate and municipal bonds, unit investment trusts (UITs), and other fixed income securities.
The proposals detail plans to build a centralised RTTM system that can process a range of eligible fixed income securities from DTCC clearing subsidiary, National Securities Clearing Corporation.
Under the plans, NSCC will use an RTTM model developed by GSCC, currently in production for US Government securities. GSCC designed its system to accommodate other fixed income products and has been working for more than a year with DTCC and MBS Clearing Corporation (MBSCC) to develop cetnralised trade matching capabilities for their respective fixed income products.
A system for mortgage-backed securities will be available for participant testing by year-end 2001, and the target date for implementing RTTM to process NSCC-eligible securities is mid-2003.
For NSCC customers, the system will be designed for rapid error detection and resolution to provide for 100% matching of trades on trade date. Other benefits will include reduced telecommunication and linkage costs for processing fixed income securities and the creation of standardised interactive messaging formats for trade input.
"A centralised real-time fixed income matching system is a core requirement for building a straight-through processing infrastructure to accommodate settlement on a next-day basis," says Dennis Dirks, chief operating officer for DTCC. "In addition, our ongoing development of a centralized RTTM system for all fixed income transactions supports an industry goal to achieve processing synergies across clearing corporations."