Ever since the passing of the Dodd-Frank bill, companies have been thinking about (or at least they should be thinking about) how they will come up with a cost effective solution to keep them compliant under the new regulations. Many software providers have been trying to work out these solutions on their own in order to help their buy-side clients, while others have decided to join forces. For example:
The DTCC, MarkitSERV and AcadiaSoft have decided to come together in a joint effort to improve the communication and messaging tactics concerning the collateral that is required between counterparties for OTC derivative transactions. This is one of the first steps that anyone in the industry has taken to bring greater transparency to the new OTC world created by Dodd-Frank.
How will these companies be working together? MarkitSERV is going to begin providing clients with AcadiaSoft’s messaging platform. This will aid in the managing of communication that is required for collateral, and it will create a more efficient audit trail to help ease transparency concerns. These messages will then be processed through the DTCC’s Trade Information Warehouse facilities and regulatory reporting interface.
The coming together of these three companies will help streamline the new post-trade requirements and messaging standards for OTC derivatives. Their willingness to join forces and work together will put their clients at ease when it comes to transparency and trading under the new Dodd-Frank regime.
These companies have created the first one-stop-shop under the new regulations, in what hopes to be a very affective process. Perhaps other companies will now take notice and decide that two heads (or in this case three) are better than one.