DTCC’s GC Direct gaining traction with custodians

JP Morgan and Brown Brothers Harriman have gone live on DTCC’s GC Direct service, with four more custodians set to sign up this year.

Established in April 2015, the GC Direct feature is designed to allow global custodians and prime brokers to take on a more collaborative role in standing settlement instructions (SSI) maintenance.

“Brown Brothers Harriman and J.P. Morgan are already live with the GC Direct feature and we are working with another four global custodians who we hope will begin using the service later this year,” said Bill Meenaghan, executive director of DTCC’s Omgeo ALERT.

“If all six global custodians go live as planned, then most investment managers should achieve 40 to 50% coverage of SSIs. A large amount of their workload would be automated and managed by the custodian rather than the investment managers themselves.”

The GC Direct workflow automates the exchange of SSIs between a custodian’s central repository and the ALERT host using dedicated ISO 20022 compliant messages.

Meenaghan also suggested that the GC Direct platform would increase the efficiency of data use in SSI’s that has traditionally been inefficient.

“Currently a large number of firms still use manual processes to manage SSIs. Files are sent over unsecured e-mail by the custodian to the investment manager.”

This process is not audit proof and is very inefficient because the investment manager has to add the SSI to the Omgeo ALERT database manually. This is not only an inefficient process, it is also error prone as there is more scope for mistakes to be made with the data.”