DTCC Moves to Testing Phase for Trade Information Warehouse Project

The Depository Trust and Clearing Corp. (DTCC) is moving to the next phase in its project to “re-platform” its credit derivatives processing utility using blockchain technology.

DTCC will begin the testing phase of the Trade Information Warehouse (TIW), with 15 participant banks as well as MarkitSERV. Once the testing on the new platform, which has been built using distributed-ledger technology is complete, DTCC will involve a larger group in a second phase. Testing is expected to end by the first quarter of 2019 with the platform’s launch to be scheduled soon after.

The project is a partnership between DTCC, IBM, Axoni, and blockchain consortium R3.

Val Wotton, managing director, product development and strategy, derivatives and collateral management at DTCC, says the functionality of TIW has been completely recoded.

“Since selecting the consortium of IBM, Axoni, and R3, DTCC and its partners have completely recoded the functionality of the TIW, utilizing DLT and the cloud for scalability, optimal performance, flexibility, and to reduce costs,” Wotten says. “The testing plan, which includes test cases and test data, was developed with input from our steering committee and includes an independent project management team for coordination and testing expertise.”

TIW will automate record keeping, lifecycle events, and payment management for cleared and bilateral credit derivatives. It provides lifecycle event processing services for around 98 percent of credit derivative transactions around the world. The use of distributed-ledger technology, participants say, will mean that the utility will act as a golden record for credit derivatives settled through CLS.

Test participants will conduct end-to-end structured user acceptance tests, use simulated use cases to test data, and validate system interactions.

“We are currently conducting structured user-acceptance testing (UAT) that involves a coordinated effort to test functionality in a controlled environment with the key major participants at the same time,” says Wotten. “Participants will not only be able to validate MarkitSERV and DTCC’s new systems, but also the interaction with existing systems within firms and with other key market infrastructure providers.”

Wotten adds DTCC, and the industry participants in the testing, are not in rush to finish testing of the DLT-based TIW “as we want to ensure the testing process is thorough and address any issues in advance.”

DTCC had earlier planned the TIW roll-out for early 2018. It was pushed out to the end of 2018, then to early 2019. While banks and market participants are the primary targets of the platform’s testing, other services, including TradeServ—which will replace DSMatch—are also dependent on TIW and will engage in the testing phase.