Clifton Kemp, Vice President at BNY Mellon’s Pershing.
DTCC’s Institutional Trade Processing is reimagining post-trade processing to enable management of the entire trade lifecycle – from post-execution to settlement – from one platform, increasing efficiencies and reducing overall costs along the way.
Achieving such a transformation requires that redundant platforms be eliminated. Therefore, DTCC has announced that it will end support for OASYS in October 2021. To prepare, we have enhanced CTM’s support for US trade flows, providing clients the ability to migrate their US trade flow volume off OASYS and onto CTM. This will eliminate a redundant platform and additional touchpoint to provide firms with a single central matching engine.
BNY Mellon’s Pershing was among the first firms to partner with DTCC to make the move to support the enhanced U.S. trade functionality provided by CTM. In the following Q&A, Clifton Kemp, Vice President at BNY Mellon’s Pershing, talks about the firm’s migration experience and the benefits of CTM for their clients.
DC: Our clients have been clear about wanting to reap the benefits of a single central matching engine. How has Pershing prepared for the retirement of OASYS and the migration of US trade flows to CTM?
P: We know from our clients that streamlined procedures and enhanced efficiencies are critical to helping them maintain a competitive edge and provide optimal service to their end clients. By being at the forefront in partnering with DTCC we intend to help our clients achieve these important goals. In addition to engaging with DTCC working groups to prepare for the migration, we created a proprietary user interface that gives our CTM users a look and feel that’s similar to the soon-to-be-retired OASYS system. Recent upgrades to our CTM integration also have enhanced exception resolution handling and step outs. We believe that these steps, taken together, are critical components of Pershing’s continued investment in our institutional support model.
DC: How does being an early mover to CTM position Pershing’s clients for success?
P: Being early to market has helped our clients in two ways. It gives them time to adapt to a new process gradually with the knowledge that they will be fully transitioned before the retirement date. And, secondly, it allows them to support their clients who were also early adopters of US trades on CTM.
DC: What value does Pershing see for supporting US trades on CTM? Do you see clients’ matching/affirmation rates going up?
P: CTM enhances efficiencies between buy- and sell-side firms by sending both global and domestic block-trade allocations though one system. There is value in streamlining duplicative systems. Last year’s volatile markets really highlighted the criticality of efficient, straight through trade processes in the post trade cycle. In addition, CTM features an enhanced central matching workflow with settlement notifications and automated standing settlement instructions (SSIs) from the ALERT platform. At Pershing, our affirmation rate is 92.5%, which continues to be above the industry average of 89%. We expect to see this rate increase after migration to CTM due to the upfront matching of trade details and settlement instructions.
DC: What functionality within your proprietary user interface (UI) has helped ease the transition?
P: The transition has been smooth in part due to the low-touch process that allows firms to input matching executed broker blocks in under five seconds. Matched allocations automatically become fully processed trades inclusive of confirm generation in real time. We also made sure to fully support CTM’s global and US domestic trade flows, including step-out functionality where again we were among first to market to support, along with TRACE/MSRB reporting at the block level.
DC: Pershing is a front runner in preparing to retire OASYS. Have you seen this generate new client interest?
P: Yes. We’ve seen interest from firms that were interested in being early adopters. They understood that our early adoption of CTM is part of an overall culture of thinking ahead, collaborating with our clients and developing new solutions to improve operational efficiency and the client experience.
DC: How many clients has Pershing migrated to date?
P: Just over 70 percent of our OASYS contracted users have migrated to CTM so far.
DC: What feedback have you heard from client firms that have already migrated?
P: Our clients rely on Pershing for a workflow that allows them to efficiently process trades from post-trade confirmation to settlement. Firms that already migrated appreciate that the CTM interface offers full functionality and supports their clients as they transition.
Clifton Kemp is a Vice President in the Client Services Delivery division at Pershing. He is a manager in Global Trade Processing and is responsible for oversight of the Central Trade Manager application. He began his career with Pershing in 2009. Clifton earned a degree in Economics from Michigan State University.