May 28, 2009 / 8:54 PM / 10 years ago

DTCC applies to become regulated trust company

CHICAGO, May 28 (Reuters) - The Depository Trust & Clearing Corp. (DTCC) said on Thursday it plans to transform its credit-default swaps warehouse into a limited purpose trust company as it seeks an expanded role in post-trade processing of over-the-counter derivatives.

New York based DTCC has filed applications for membership in the U.S. Federal Reserve system and with the New York State Banking Department. The new company would be called the Warehouse Trust Company LLC.

DTCC also said it plans to create a subsidiary in Europe to offer warehousing of credit default swap contracts, a move that has been pushed by European securities regulators.

The U.S. Treasury Department this month pushed a plan to mandate clearing of certain standardized OTC contracts, whose unbridled expansion earlier this decade has been blamed in part for the global credit crisis.

“DTCC is responding to the expressed intentions from regulators globally to bring added risk protection and regulatory oversight to the credit derivatives market,” Donald Donohue, DTCC chairman, said in a news release.

DTCC operates the only global trade warehouse for records of credit default swap deals, covering some 2.3 million contracts with about $29 trillion in gross notional value.

Reporting by Ros Krasny; Editing by Dan Grebler

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