Post-Trade Confirmation and Matching Services

Back-office and operations staff at firms that trade OTC derivatives check the terms of each trade with the counterparty after the trade is agreed. Systems staff connect the firm's internal trade entry to outside services that confirm trades electronically.

Why confirm electronically after a trade is agreed

If the terms are not checked after a trade is agreed, input errors can go undetected. Around 2005, confirmation backlogs in credit derivatives increased dealers' operational risk by making it harder to detect errors that could lead to losses¹. The procedure by which the parties check the terms is the trade confirmation. The contents and procedures of a paper confirmation are covered in Trade Confirmations.

Paper confirmation cannot keep up when trading grows. Around 2005, confirmation of credit derivatives generally worked as follows. The dealer prepared a confirmation by hand and faxed it, the receiving party compared it by hand with its own records, and if the two matched, it signed the confirmation and faxed it back. This procedure took a great deal of manual effort and was hard to scale as trading grew².

An electronic confirmation service does this comparison in a system. It collects the parties' terms in one system and establishes the confirmation by trade matching or affirmation. Such a system is called a confirmation platform. From here on, this kind of system is called the "service". Several providers offer similar services³. Examples are Deriv/SERV of the Depository Trust & Clearing Corporation (DTCC) and OSTTRA, an operator of post-trade processing services.

DTCC provides clearing, settlement, and other services through its subsidiaries. OSTTRA was established in 2021. A 2012 document describes MarkitSERV as jointly owned by DTCC and Markit, but a 2009 list cites Deriv/SERV as a system separate from MarkitWire.

The path from execution to clearing and reporting

This section describes the flow using OSTTRA's service as the example, and other providers may differ. OSTTRA divides post-trade processing into the steps of affirm, confirm, allocate, clear, and report⁴. The path from confirmation through clearing and reporting is as follows.

1. Execution. The trade is made. Brokers, dealers, and trading venues can submit trades that have been made⁴.
2. Submission of terms. The trade terms are sent to the electronic confirmation service. In one form (matching), the trade details that the parties submitted are matched. In the other (affirmation), the parties accept terms submitted by a broker, a dealer, or a trading venue⁴.
3. Confirmation. When the terms agree or the parties accept them, the confirmation is established. Discrepancies are resolved in a process between the parties⁴.
4. Acceptance for clearing. OSTTRA's service can send trades to be cleared to a central counterparty⁴.
5. Reporting. OSTTRA's service can send the details of reportable trades to a trade repository⁴.

OSTTRA explains that, for interest rate derivatives, the legal confirmation that follows affirmation starts clearing and trade reporting⁵.

Figure description

The figure shows, in five steps and following OSTTRA's description for interest rate derivatives, how the terms of a trade are confirmed in an electronic confirmation service after execution and then sent to a central counterparty and a trade repository. The execution lane is where the trade is made. The service establishes the confirmation by matching the trade details the parties submitted or by receiving the counterparty's acceptance. For interest rate derivatives, after confirmation, trades to be cleared go to the central counterparty and reportable trades go to the trade repository. If the terms do not agree, the confirmation is not established, and the parties resolve the discrepancy.

Consider a hypothetical example in which Company U and Bank V enter into an interest rate swap with a notional amount of 10 billion yen and a term of 5 years, and Company U pays a fixed rate of 1% per year. Company U enters the notional amount as 10 billion yen, and Bank V enters it as 1 billion yen. Matching the two in the service reveals that the notional amounts do not agree.

If this is left as it is, the fixed-rate interest is 100 million yen per year in Company U's records and 10 million yen per year in Bank V's records. The interest that Bank V expects to receive is 90 million yen per year less than the interest that Company U expects to pay.

Conversely, if Bank V had entered 100 billion yen, the interest in Bank V's records would be 1 billion yen per year, 900 million yen per year more than Company U expects to pay. In either direction, if the discrepancy is found and corrected right after execution, the records agree before any interest is paid or received.

How affirmation and matching differ

There are two ways to establish a confirmation, depending on whether the submitted trade details are accepted or matched.

In OSTTRA's service, affirmation is the first of many processing steps, and accepting a trade starts the next steps, such as creating the trade record and confirming it. Confirmation checks the terms by matching the trade details the parties submitted or by affirming them⁴. A February 2015 Markit letter lists affirmation, confirmation, and matching side by side as ways for the parties to reach agreement⁶.

The confirmation backlog and electronic confirmation

According to the GAO report, the response to the 2005 confirmation backlog in credit derivatives increased the use of electronic confirmation. The same report states that at the end of September 2005, the 14 major dealers had 153,860 outstanding confirmations, of which 97,650 (63%) were outstanding more than 30 days and 63,322 (41%) more than 90 days. In September, the 14 dealers had made about 130,000 trades⁸.

There were two causes of the backlog. One was manual confirmation that could not keep up with the growth in trading. The average number of trades per week at a large dealer rose from 644 in 2004 to 1,450 in 2005. The other was the practice of assigning one's side of a trade to a third party without notifying the counterparty, which made it hard for the original dealer to confirm⁹.

Around 2002, DTCC began working with several dealers on a system that compares, matches, and confirms trades electronically, and it launched Deriv/SERV at the end of 2003. In mid-2004, 15 dealers and 7 end users had registered, but in 2004 up to 85% of credit derivatives trades were still confirmed manually. The share of trades confirmed electronically was up to 46% in September 2005¹⁰.

On September 15, 2005, the Federal Reserve Bank of New York held a meeting of major market participants and supervisors, with the confirmation backlog and the handling of trade assignments on the agenda¹¹. On October 5, it issued a statement welcoming the commitments of the 14 major dealers. The main contents of the dealers' letter (dated October 4) are as follows¹².

The table compares the results, as a total for the 14 dealers, between September 2005 and the end of October 2006¹³.

At the end of October 2006, about 90% of trades were eligible for electronic confirmation, about 94% of those were confirmed electronically, and 84% of the electronic confirmations were completed within 5 business days¹³.

In November 2006, DTCC also launched a system that keeps records of electronically confirmed trades (the Trade Information Warehouse)¹⁴.

The share of electronic confirmation was also an issue for interest rate swaps. For interest rate derivatives in September 2008, 87% of trade volume was eligible for electronic confirmation, but only 54% was actually confirmed electronically¹⁵.

How names and operators changed

The names and operators of the service have changed over time. The table lists what the sources say, by point in time. The point in time in the table is the date of each source.

SwapsWire is a service that the GAO report of June 2007 cited, as of January 2006, as an example of an electronic confirmation system. MarkitSERV is the provider that a 2012 letter described as offering trade processing, confirmation, matching, and reconciliation services.

Because the August 2012 document says joint ownership and the February 2015 document says wholly owned subsidiary, it follows that DTCC's stake passed to Markit in between.

OSTTRA describes itself as the combination of four businesses: MarkitServ, Traiana, TriOptima, and Reset. In its own history, it says that MarkitServ played an important role in moving the interest rate and credit markets from paper-based procedures to electronic affirmation and confirmation²⁰.

OSTTRA also gives notice of a project to replace old names with new ones. In the replacement table, MarkitSERV and Markit become OSTTRA, MarkitWire and TradeServ become OSTTRA Connect, and SwapsWire becomes Wire, in screens and documents. Where both names are shown and need to be distinguished, MarkitWire and TradeServ become Wire and Serv, respectively. The replacement is said to start with the test-environment update on August 14, 2026 and the production update on August 29 of the same year. It is described as a change in display only, with no change to business procedures or connections²¹. The old names in the table are the names as of the date of each source.

OSTTRA's range of services

In OSTTRA's description as of October 8, 2026, trade processing has the following five steps⁴.

OSTTRA describes OSTTRA Connect as its central platform for affirmation and confirmation of interest rate derivatives⁵. The 2012 and 2015 letters state that MarkitSERV provides trade processing, confirmation, matching, and reconciliation services for interest rate, credit, equity, and foreign exchange derivatives³⁶.

DTCC describes the Trade Information Warehouse as a system for keeping records of credit derivatives and processing their lifecycle events. The same page carries a list of credit events published by DTCC and OSTTRA²².

This page does not cover the relative merits of the services, the number of users, other providers' services, or the path for asset classes other than interest rate derivatives.

Notes

1. U.S. Government Accountability Office (GAO) 2007 report GAO-07-716, the summary paragraph ("the credit derivatives backlogs increased dealers' operational risk by potentially allowing errors that could lead to losses or other problems to go undetected"). ↩

2. U.S. Government Accountability Office (GAO) 2007 report GAO-07-716, the first paragraph of "Two Factors Largely Caused the Confirmation Backlogs at Dealers" (a confirmation is faxed, the receiving side compares it by hand with its own records, and if they match, it signs and faxes the confirmation back). The report describes this procedure as "resource intensive". ↩

3. MarkitSERV's letter to the European Securities and Markets Authority (dated August 5, 2012), footnote 1 on page 1 and the "Introduction" paragraph. It describes MarkitSERV as jointly owned by DTCC and Markit and says similar services are "offered also by various other providers". ↩ ↩² ↩³

4. OSTTRA, "Trade Processing", the introductory text and the Affirm, Confirm, Allocate, Clear, and Report items under "Explore our Trade Processing Solutions". Checked on October 8, 2026. ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸

5. OSTTRA, "For Interest Rate Derivatives", the introductory description and the Trade Affirmation, Clearing Connectivity, and Trade Reporting items. Checked on October 8, 2026. ↩ ↩²

6. Markit's letter to the European Securities and Markets Authority (dated February 13, 2015), the body text on page 2, footnote 3 (describes MarkitSERV as "a wholly owned subsidiary of Markit Group Limited"), and footnote 4 ("affirmation/confirmation or matching"). ↩ ↩² ↩³

7. The 14 major dealers' letter (dated October 4, 2005), page 1, the "Development of Metrics to Measure Industry Progress" paragraph (data on trade volume, confirmations, settlement, and fails to be provided 10 business days after the end of each month). ↩

8. GAO-07-716, Table 2 ("Number of Credit Derivatives Trade Confirmations Outstanding for 14 Major Dealers, September 2005"; source: Markit Group data) and the preceding paragraph (about 130,000 trades in September). ↩ ↩²

9. GAO-07-716, "Two Factors Largely Caused the Confirmation Backlogs at Dealers" and the paragraph on the growth in trading (trades per week rose from 644 in 2004 to 1,450 in 2005). ↩

10. GAO-07-716, the paragraph describing DTCC's automated confirmation system (work began in 2002, Deriv/SERV launched at the end of 2003, 15 dealers and 7 users by mid-2004, up to 85% confirmed manually in 2004, and up to 46% confirmed electronically in September 2005). The reasons for slow adoption (DTCC staff's explanation and a hedge fund staff member's account) are in the same paragraph. ↩ ↩² ↩³

11. Federal Reserve Bank of New York, "Statement Regarding Meeting on Credit Derivatives" (September 15, 2005). ↩

12. Federal Reserve Bank of New York, "Statement Regarding Developments in the Credit Derivatives Markets" (October 5, 2005), and the 14 major dealers' letter (dated October 4, 2005), page 2 (30% reduction, use of DTCC, client registration, T+5). The scope of clients and the deadlines are on page 3 of the letter. ↩

13. GAO-07-716, the paragraph beginning "Since the initial meeting in September 2005" (153,860 to 37,306), the summary paragraph (30-day backlog down 94%), the description of Figure 4 (46% to 85%), and the paragraph on the end of October 2006 (about 90%, about 94%, 84%). ↩ ↩²

14. GAO-07-716, the paragraph containing "DTCC launched the warehouse in November 2006". ↩

15. Federal Reserve Bank of New York, "Commitments to further strengthen the operational infrastructure for OTC derivatives" (June 2, 2009), page 11, the description column of the interest rate derivatives table (54% and 87% in September 2008). ↩

16. GAO-07-716, the paragraph containing "to require their active clients to use it or a comparable automated system, such as SwapsWire, by mid-January 2006". ↩

17. Federal Reserve Bank of New York, "Commitments to further strengthen the operational infrastructure for OTC derivatives" (June 2, 2009), the interest rate derivatives table ("Upon delivery by MarkitSERV of an interoperable confirmation process between MarkitWire and DTCC confirmation platforms"). ↩

18. IHS Markit, "CDS Indices Primer" (2021 edition), the section describing market participants ("OSSTRA (formerly MarkitSERV)"; the original spells it OSSTRA). ↩

19. OSTTRA, "KKR Completes Acquisition of OSTTRA from S&P Global and CME Group" (dated October 10, 2025), the body text and the "About OSTTRA" paragraph. ↩

20. OSTTRA, "About us", the paragraphs on the combination of four businesses and the position of MarkitServ. Checked on October 8, 2026. ↩

21. OSTTRA, "OSTTRA Trade Manager interface renaming reference guide", the schedule (test environment on August 14, 2026; production on August 29), the impact (display-only change), and the table mapping old names to new names. Checked on October 8, 2026. ↩

22. DTCC, "Trade Information Warehouse", the introductory description and the two documents under "DTCC OSTTRA Event Processing". Checked on October 8, 2026. ↩