Sapient Drives New Connectivity Standard for Cleared Derivatives

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The Clearing Connectivity Standard will allow futures commission merchants to transmit clearing information to custodians on asset managers' behalf.

Boston-based financial services provider Sapient Global Markets has completed a new industry standard for over-the-counter (OTC) derivatives activity connecting for asset managers, futures commission merchants (FCMs) and custodians. The new format, called the Clearing Connectivity Standard, or CCS, enables FCMs to transmit OTC clearing information to custodians on asset managers' behalf, without which buy-side firms face onboarding, operational risk, and high costs of interface.

The standard was developed in collaboration with FCMs and custodians, and piloted by 12 buy-side firms. It will be initially cover interest-rate swaps (IRS) and credit default swaps (CDS) cleared through LCH.Clearnet and CME Group, with a wider array of products to be covered in the future.

"The buy-side community will benefit greatly from this initiative. We recognize the CCS as something that will help many participants for years to come. With a unique understanding of specific needs of asset managers and FCMs, reporting and operational processes, Sapient Global Markets is uniquely qualified to facilitate this effort," says Jim Bennett, managing director at Sapient Global Markets.

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