The Derivatives Service Bureau (DSB) has announced additional service improvements for 2019, as well as estimated 2019 user fees 4% below 2018 levels, assuming similar uptake of the service amongst the OTC derivatives community.
The DSB is a fully automated generator of International Securities Identification Numbers (ISINs) for OTC derivatives. The DSB is the first numbering agency designed to operate on a global basis to meet the particular requirements of the OTC derivatives markets including near real-time allocation of ISINs.
The 2019 financial projections incorporate additional service improvements requested by industry during the 2018 consultation process, including increased operational hours to 24 / 6.5 and improved email support response times. Enhancements to the OTC-ISIN functionality are also planned for later in 2019 to enable real-time updates to DSB reference datasets such as currency codes and benchmark reference rates. Costs related to this enhanced functionality will be amortized from 2020, after the functionality is operational and in accordance with the DSB capital expenditure model approved through industry consultation.
“With the 2017 financial audit now complete, we are delighted to confirm the 2017 build and operating costs of the service were well under budget,” said Emma Kalliomaki, DSB managing director. “Under the cost recovery principles of the DSB, these savings will be passed back to users in 2019.”
The audited DSB build cost of €5,101K was €751K under budget, resulting in €250K pa of reduced amortisation costs in each of 2019 / 2020 / 2021. Additionally, 2017 Q4 audited operating costs of €1,612K were €672K below audited Q4 2017 revenues. These Q4 2017 operational cost savings will also be rebated in the 2019 fee year and more than offset the underlying increase of 3% due to industry requested service improvements, increased transparency initiatives and inflation.
“Building a state of the art technology platform to aggressive timescales and below budget was a challenge, especially considering the large number of unknowns when the project started,” said Sassan Danesh, managing partner of Etrading Software, the Management Services Partner of the DSB. “Achieving this outcome required deep OTC expertise coupled with knowledge of the latest cloud-based technologies and substantial experience of managing a diverse OTC market stakeholder base. We are grateful to the DSB Board for their strategic guidance and to OTC market participants for their collaborative approach to launching the service.”