DTCC Connection

Nov 03, 2015 • DTCC Connection

DTCC Executive Joins Discussions on ISO 20022 and Asset Servicing Automation

By Michael Battaglini

Tom Sakaris
Thomas Sakaris, DTCC Managing Director, Equities Clearing

Thomas Sakaris, DTCC Managing Director, Equities Clearing, spoke on a pair of industry panels at Sibos 2015 covering the global harmonization efforts around the ISO 20022 standard and the challenges in automating source documentation from issuers in asset servicing.

Global Harmonization and Standards

Sakaris, along with other industry thought leaders, spoke on the second day of the conference, during the Market Infrastructures Forum, on the topic of “Driving the Industry Towards a Truly Global ISO 20022 Standard.”

Presenters shared their views on a proposed framework for global harmonization of the implementation of ISO 20022.

“DTCC’s implementation of standard messaging facilitates interoperability, increases efficiency and transparency, mitigates risk and reduces costs for the industry,” Sakaris said. “We agree with the concept of global harmonization through ISO 20022 messaging for Corporate Actions transformation, where we’ve made significant progress.”

Sakaris gave specific examples where DTCC’s multi-year Corporate Actions Transformation initiative aim to retire many proprietary file formats and transmissions. DTCC has also implemented the new ISO 20022 messaging standards for the full lifecycle of distribution events, including announcements, instructions and allocations.

Related: DTCC’s Corporate Action Transformation Initiative

During the forum, a question was posed asking if ISO 20022 messaging will become standard for DTCC clients outside of Corporate Actions. Sakaris answered by stating, “Other areas/businesses will be considered in due time, as we continue to explore implementing ISO 20022 messaging standards in applications where there is a strong business case, provides significant benefits to our clients and does not impose needless costs.”

Being compliant with the latest Standards Release (SR) version was an important area of discussion for the forum. The audience was informed of the annual release schedule, which would be available each November.

The session was followed by a workshop-style discussion to collect feedback from the audience. The interactive session did what it was intended to do, according to Sakaris. “The amount of dialogue created between the audience and the speakers was very positive, in my opinion,” Sakaris added. “The consensus is that ISO 20022 is well received.”

Asset Servicing Automation

Sakaris also spoke during the “Asset Servicing: Issuer to Investor Automation” workshop, during the third day of the conference.

The workshop included discussion on how the lack of automation and straight-through processing (STP) between the issuers/issuer agents and their central securities depositories (CSDs) remains one of the most important risk factors in the asset servicing area for the entire securities value chain. Accuracy and timeliness of Corporate Actions and General Meeting announcements are critical for end investors, and shareholder transparency has become important for issuers.

In recent years, a number of initiatives have been launched in the Asia Pacific region to bridge the transparency gap between issuers and end investors.

Sakaris and other speakers went on to discuss why markets in the Asia Pacific region have the opportunity to lead the way in these initiatives. They also questioned if it was possible to replicate this effort in other, more mature markets such as the U.S. Less mature markets, such as Russia and Singapore, have structures that allow them to control the end-to-end flow of data from issuer to investor.

“It has to do with market structure, where there is integration between issuers, market centers and the CSDs,” Sakaris explained. “That is not an easy thing to replicate in mature markets, which tend to be more fractured.”

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