DTCC congratulates Murray Pozmanter, Managing Director, President of DTCC Clearing Agency Services and Head of Global Business Operations, who recently announced his retirement, effective April 14. Pozmanter has had a profound and positive impact on DTCC and the US financial markets during his 16 years with the firm, greatly benefitting the industry, our clients and, ultimately, the end investor.
DTCC Connection sat down with Pozmanter to discuss his notable achievements, industry milestones and what’s next – both for himself and the industry.
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DC: What were your initial impressions of DTCC when you joined 16 years ago? How have you seen the company evolve during that time?
MP: I had been in financial services and had worked with DTCC for a long time before I was hired here. I knew coming in that a lot of the employees at DTCC were home grown, with very long-tenured people with deep subject-matter expertise. DTCC has grown so much since I joined. It doesn’t feel like I’ve been here for 16 years because the company – the culture, our global outlook, the entrepreneurial spirit – has shifted, evolved and changed so much. It is a special organization.
DC: You had a hand in successfully managing though numerous market shocks over the years. Which did you find most challenging? What lessons did you learn early on that you applied to future crises?
MP: When I started, it was right at the beginning of the 2008 financial crisis. First was Bear Stearns, which then precipitated an even wider collapse, with the Lehman Brothers close-out. There were so many lessons learned in how we handled Bear Stearns and Lehman. The firm failures we had managed before that were small broker-dealers, never a top five, and nothing of that scale and impact before. We gained a tremendous amount of experience from navigating and containing the fall-out from Lehman that we still use some of those lessons in our close-out Playbook today.
There are things that we still return to again and again – the wind-down plans, the new requirements and legislation that drove the early days of Dodd-Frank, how we managed the shocks of market volatility, our responsibility to the industry as a Systemically Important Financial Market Utility (SIFMU). All of these are lessons learned that we continue to apply.
DC: Under your leadership, DTCC launched several new services that have helped shape the direction of the industry. What’s the achievement you’re most proud of? What impact have they had on market structure and market stability?
MP: I am especially proud of the MBS Central Counterparty (CCP) initiative. It has been such a game changer for the industry. We had it up and running in pilot as “CCP for a day,” and thus were able to use it for the Lehman close-out to resolve market risk and bring much-needed stability to during a moment of crisis. The sheer size of the Lehman close-out would have been incredibly disruptive without these CCP tools available to us, even on a trial basis.
Shortening the settlement cycle from T+3 to T+2 in 2017 was also a huge achievement for DTCC and the industry. The incredible collaboration and partnership across the industry to ensure a seamless transition was unprecedented. And the success of the move to T+2, of course, has led to the conversations we’re having today about shortening further to T+1 and beyond.
DC: If you could change anything, what would you do differently?
MP: Hindsight is always 20/20 but I do think it’s important to look to the past to help shape how you move forward. I’m really proud to have played a role in advancing so many exciting initiatives and transformational ideas. We established DTCC as a thought leader on a wide range of topics, and those efforts have recently translated into several exciting industry-wide initiatives, such as T+1, increased central clearing of US Treasuries, responding to new rules and regulatory changes, to name just a few, that have made the markets safer, more resilient, and efficient. In addition, we’re making good progress on our own modernization efforts. This represents a significant body of work, so the firm will need to continue prioritizing to execute successfully.
The industry wants DTCC to play a larger role moving forward, and the company has the vision, talent and expertise to support clients in new ways. It’s a challenging time for our clients, but I’m confident DTCC will continue to make a positive impact. For me, it’s not about changing the past but about building on those past accomplishments to make a bigger impact.
DC: You helped guide the industry through the change from T+3 to T+2 in 2017 and have been coordinating plans to move to T+1 in 2024. What’s different about this move? Where is settlement headed next?
MP: Moving from T+3 to T+2 didn’t require structural changes, which meant that we didn’t need to change processes on Trade Date (T). However, that transition helped lay the foundation for T+1. In some cases, firms added more resources and managed to squeeze a day out of the cycle and accelerate their processing at that time.
Now, with the move from T+2 to T+1, firms recognize that there will need to be a lot of changes to cut offs and deadlines, automating affirms and confirms, adjustments to how the industry processes FX, stock lending, and other market structure shifts to accommodate a shorter settlement cycle.
The institutions that put increased effort into move from T+3 to T+2 are relatively well positioned for T+1. Others will need to prioritize work and move quickly to make the deadline. One thing I’m certain about is that DTCC will continue to provide support to market participants to help them during this period.
As for where settlement is headed next, moving beyond T+1 to any kind of same day settlement of T+0, or even morning of T+1, will require additional discussion, including a rigorous cost-benefit analysis across the industry, because it will require significant major market structure changes.
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DC: Among peers, you’re known as an exceptionally strong ally in advancing diversity, equity and inclusion at DTCC. How have you put your beliefs into action?
MP: I've always focused on putting the very best talent into positions where they will succeed. It is very important to be mindful of how we promote people in the middle ranks, increasing our bench strength, including them in growth opportunities and preparing them to serve as leaders of tomorrow. You cannot just magically make it happen. You must increase diversity in the talent pool and purposely and intentionally foster diversity of opinion.
DC: Looking ahead, what do you think are the most important issues that the industry will need to address?
MP: Certainly, all things cyber will be a very significant topic. When you consider information security in general, deploying new technology, AI, DLT and increased use of public and private cloud, these will create new vectors for attacks. The attacks are not going to slow do, so the industry needs to work collaboratively among itself and with the public sector to strengthen protections and build greater resilience.
DC: You’ve made a major impact at DTCC and within the industry. What’s next for you?
MP: Now that we’re stabilized following the pandemic, I know I am leaving DTCC at a good time. I’ve had an amazing and rich career at DTCC, and there are so many exciting things about being at the center of it all. I know I want to take some time off to rest and recharge, but I also want to stay active in market infrastructure.
DC: Any final thoughts as you plan to retire from DTCC?
MP: It may sound cliche, but I will miss the people. DTCC has the very best colleagues, and this is just an amazing, unique place that fosters that kind of passion and deep commitment to excellence. Colleagues become friends, and friends become family, and I will miss my DTCC family.