The U.S.' Depository Trust & Clearing Corporation (DTCC) is piloting a new service which provides members of the National Securities Clearing Corp. with the ability to monitor the intraday net value and share exposure for equity transactions of their own and their correspondent clearing firms.

The new DTCC Trade Risk Pro monitors credit limits and immediately alerts the user when positions near or exceed pre-established warning thresholds and limits. It will give clearing firms a near real-time snapshot of all their equity trading activities and those of their customers from all U.S. exchanges in a matter of seconds.

Through a user customizable dashboard, financial firms can set credit limits on the specific trading activities of individual customers and internal businesses.When a pre-selected early warning limit is reached, the dashboard will alert the clearing firm, says Elena Staloff, vice president of equity clearing strategy for DTCC. The clearing firm can then do further research after driling down to the individual securities traded.

As a centralized solution, Trade Risk Pro saves clearing firms from having to build their own proprietary platforms with customizable dashboards, explains Staloff. Three clearing firms are now in pilot with the service. The National Securities Clearing Corp. (NSCC) is the U.S. equities and fixed-income subsidiary of DTCC, the U.S. umbrella organization for clearing and settling U.S. securities transactions. About seventy members of the NSCC can clear trades for other firms.

Trade Risk Pro, which is expected to be fully implemented by mid-2012, leverages NSCC's Universal Trade Capture System, introduced in early 2011, which provides clearing firms with a near real-time consolidated report on all of the trades which have been executed on all of the U.S. exchanges. Trade Risk Pro provides an additional tool which enables the clearing firm to add on the automated credit limit alerts.

Written by Chris Kentouris, Editor-in-chief (Chris can be contacted through Chris.Kentouris@hotmail.com)

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