DTCC Updates Industry Initiatives

Following its December 2012 industry roadmap, the Depository Trust & Clearing Corporation has released a whitepaper detailing its plans for its eight institutional post-trade processing, collateral management and other initiatives, that are expected to take the organization into next year.
By Rob Daly(2147487629)
Following its December 2012 industry roadmap, the Depository Trust & Clearing Corporation (DTCC) has released a whitepaper detailing its plans for its eight institutional post-trade processing, collateral management and other initiatives, that are expected to take the organization into next year.

“What is outlined in the white paper are all of the major settlement related initiatives, which we have planned going into 2015,”says Dan Thieke, managing director and general manager, settlement & asset services at the DTCC. “It is a priority for us to be sensitive to the demands that we put on our clients.”

The DTCC’s settlement initiatives include pre-settlement matching and money market instruments settlement process, which both began in 2013.

The pre-settlement matching project recently met a major milestone and will meet two more by the end of the summer, says Theike. “On July 11, we lowered the Receiver Authorized Delivery limits for non-institutional deliveries that flow through DTC to $100,000 from $7.5 million. In the next phase, we will lower that to $20,000 by the end of July, and zero by the end of August, which will mean that all non-institutional deliveries flowing through the DTC will require approval.”

The remaining settlement projects aim to improve efficiency while reducing risk of processing continuous net settlement (CNS) transactions. The DTCC plans to have the National Securities Clearing Corporation’s (NSCC’s) Automated Accounts Transfer service transfer CNS-eligible securities that are eligible to settle at the Depository Trust Company (DTC) to the DTC without the related NSCC funds obligation or payment to the DTC.

In terms of collateral management, the DTCC is in continuing discussions with Euroclear and respective market regulators to form a joint venture, which will establish two new industry utilities—the Margin Transit Utility (MTU) and Collateral Management Utility (CMU). Both new offerings look to address sub-optimal collateral mobility at a global level, according to DTCC officials.

Finally, the DTCC plans to leverage Omgeo, which it fully acquired after purchasing Thomson Reuters’ outstanding share in the joint venture in October 2013, to establish a global repository for standing settlement instructions based on the existing Omgeo Alert offering.

All of these initiatives aim to improve efficiencies and lower risks, which only will help the DTCC’s goal of reducing the standard U.S. settlement cycle from three days to two days after the trade date (T+2) from three days according to Thieke.

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