The Operations Subcommittee of the IDA’s Financial Administrators Section is recommending the mandatory use of the new broker-to-broker trade matching utility for non-exchange trades.

The FAS established a working group in February 2000 to discuss straight-through-processing for System X. The working group prepared a white paper that set out the process for a broker-to-broker trade-matching model. In June 2001, the FAS approved the white paper and they agreed that it should be part of the CDS System X development stream. Trades targeted for matching are non-exchange trades that are normally done over-the-counter or directly between dealers.

For each eligible trade it would require that a member must enter the trade into the matching utility. The recipient would then be asked accept or reject the trade within one hour of executing the trade.

The recommendations were approved at the FAS annual meeting on September 14 and will be presented at the IDA board meeting in October for their approval. It will also require approval by the securities commissions.