Mention of the latest developments in credit default swaps, whether on CDOs or ABS, usually calls to mind an ever-swelling notional market value and customized deal structures. But the call for a standardized trading framework has prompted several leading industry professionals to refine plans to create standardized frameworks for documenting and tracking credit default swaps trades to make sure they are in keeping with the spirit of their original contracts.
The Depository Trust & Clearing Corp. (DTCC), a leading clearing and settlement firm, says it is close to finalizing a central trade information warehouse on CDS, which would allow swap buyers and counterparties to access updated information on each contract. Expected to be global in its reach, the warehouse would provide confirmation on downstream CDS trades. It could also compute payments that are coming due and track funds as they are moved around.