DTCC Connection

Apr 14, 2014 • DTCC Connection

DTCC Clients Express Satisfaction with Exchange Traded Funds Service

by Joseph King

In a continuing series focusing on DTCC’s client service efforts, @dtcc is speaking with executives across the various business lines about feedback they received from The Depository Trust & Clearing Corporation’s annual client satisfaction survey. 

This week, Hank Belusa DTCC Director, Equities Clearance and ETF Product Manager, speaks with @dtcc about ways DTCC’s Exchange-Traded Funds (ETF) service delivers value and benefit to clients.

Q.     What have you found to be clients’ overall sentiment on DTCC’s Exchange Traded Funds service based on the recent Customer Satisfaction Survey?

A.     Very good. It was encouraging to see 93% of respondents indicate the ETF service was valuable to them and their customers.

Q.     What were the most important features of DTCC’s ETF service as expressed by clients?

A.     Two features  consistently presented themselves:

  1. Clients voiced their satisfaction with how the NSCC ETF clearance process provides efficiencies in creating and redeeming ETFs.
  2. A second important feature is how the ETF clearance process also mitigates risk.

Q.     How does the NSCC ETF clearance process provide efficiencies in creating and redeeming ETFs?

A.     First and foremost, it provides DTCC clients a comprehensive look at the relevant information about all U.S.-listed ETF portfolios, even if the ETF’s components are ineligible for clearance and settlement through NSCC and DTC.  Moreover, the system has a web browser that displays each ETF’s portfolio which can be used by front, middle and back-office staff. Secondly, ETF agents and Authorized Participants utilize these ETF portfolios to create and redeem ETF shares with little manual effort even if the components are ineligible for clearance and settlement at DTCC.

 

Q.     How does the NSCC ETF clearance process help mitigate risk?

A.     One of the ways DTCC’s ETF service mitigates risk is by including the cash amount into the contractual value when ETF shares are created and redeemed. Capturing the cash amount, an important component in the ETF’s value, in the NSCC mark-to-market risk calculation eliminates the need for additional collateral.

For more information:

DTCC Exchange-Traded Funds

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