DTCC processes 10 million SSIs as part of industry effort to minimise settlement failures 

The landmark figure is part of an industry effort to significantly improve securities settlement efficiency rates ahead of the Settle Discipline Regime (SDR).

By Joe Parsons

DTCC has passed a key milestone with over 10 million standing settlement instructions (SSIs) processed from custodians, banks and other market participants.  

The landmark figure is part of an industry effort to significantly improve securities settlement efficiency rates, ahead of the Settle Discipline Regime (SDR) which is set to be implemented in February 2022. 

The global market infrastructure firm stated it recorded a 12% increase in SSIs processed by DTCC ALERT over the past year, of which 30% are now administered by data source providers through its custodian-managed model, Global Custodian Direct (GC Direct). 

Through the GC Direct workflow, custodian banks and prime brokers become the owner and manager of SSIs for their buy-side clients, further automating the maintenance of SSIs and driving the prevalence of reliable source data. 

“SSIs represent a substantial pain point for firms, as missing or incomplete SSIs can lead to trade failures. The increased use of ALERT is confirmation of the financial service industry’s continued focus on automation and addressing this important area of the post-trade process,” said Moira Kiernan, DTCCdirector, product management.  

With 10 million SSIs now in ALERT, the service has become the central SSI utility to reduce trade fails and increase operational efficiencies, creating significant benefits from the centralisation and automation of high quality, golden source data.” 

Since going live with the service with Brown Brothers Harriman (BBH) in 2015, the DTCC ALERT database has grown its impressive list of users to now also include BNY Mellon, CACEIS, CIBC Mellon, Citi, HSBC, JP Morgan, Northern Trust, RBC I&TS, and State Street.    

Increasing efficiencies and reducing touch points are high priorities for the financial services industry, further amplified by the COVID-19 pandemic and in anticipation ofSDR, which introduces penalty fees for failing transactions.  

A new study from DTCC in November found larger broker-dealer firms could reduce their post-trade processing costs for cash securities by up to 25% through automation and implementing a no-touch processing workflow.  

The study of nine of the world’s leading broker-dealers by DTCC found that cost savings could be achieved by up to an estimated $39 million per firm, or between 20-25%, through automation across seven areas, including SSI reference data, trade support, settlements, agent bank fees, asset servicing, financing, and technology expenses.