Four of the largest over-the-counter (OTC) derivatives clearing brokers have confirmed their support for an initiative to standardize reporting for cleared OTC derivatives.

The clearing brokers (known in the U.S. as futures commission merchants or FCMs)–BofA Merrill Lynch, Barclays, J.P. Morgan and UBS—are supporting the Clearing Connectivity Standard (CCS), jointly developed by the International Swaps and Derivatives Association and Sapient Global Markets, derivatives reporting standard.

The standard is expected to be used by the clearing broker community to transmit information about cleared OTC derivatives trades and margins to their asset manager clients, custodians and service providers.

“The CCS format will simplify and align margin and portfolio reconciliation process,” said Ray Kahn, head of OTC clearing at Barclays, in a statement. “We’re pleased to join the core group of market participants in supporting and adopting this standard, as we see it as a solution that will help to drive post trade efficiencies for our clients.”

Sapient Global Markets provides project management and consulting services for the CCS.

“The Clearing Connectivity Standard (CCS) establishes a standardized connectivity format that can be used by the FCM community to transmit OTC clearing related information to their asset manager clients, custodians and CCPs,” said Jim Bennett, global head of business development at Sapient Global Markets. “Specifically, it outlines all of the message elements that should be universally present in margin statements, defined by fields, headers and descriptions.”

Other planned enhancements include conversion of the standard from a CSV template to FpML under the guidance of the ISDA CCS Steering Committee and the FpML Working Groups.

CCS provides standardized connectivity and reporting for central counterparty-eligible interest rate and credit default swap products through LCH.Clearnet, the CME Group, and Intercontinental Exchange.

The Isda CCS Steering Committee is working with FCMs and custodians to include additional products, participants, and geographies.

“As the industry moves to implement mandatory clearing, the absence of a formal standard for formatting and transmitting margin and position data was a significant hurdle to achieving efficient and cost effective connectivity between market participants,” said Andres Choussy, global co-head of OTC clearing at J.P. Morgan.

The clearing broker support for CCS is the latest step in an industry push to standardize the OTC derivatives margin statement reconciliation process for all market participants. The adoption of CCS is expected to streamline the client on-boarding process and reduce the overall cost and operational risk associated with managing in multiple disparate reporting formats.

As part of the Dodd-Frank Act of 2010, the U.S. Commodity Futures Trading Commission (CFTC) has mandated certain OTC derivative products be centrally cleared. June 10, 2013 is the second of three CFTC mandated clearing implementation dates for the industry in 2013.