DTCC Connection

Mar 16, 2016 • DTCC Connection

DTCC Hosts Roundtable Discussion on “The State of U.S. Clearing”

By Crystal Bueno

DTCC Hosts Roundtable Discussion on “The State of U.S. Clearing”DTCC hosted a live, hour-long webinar on innovations and emerging trends in U.S. Clearing on Tuesday, March 8 for more than 500 clients, the media and interested industry participants.

The interactive roundtable addressed a range of topics including mitigating risk across the capital markets, the move to trade-date-plus-two-days (T+2) settlement, Blockchain and disruptive technologies, cybersecurity and product innovation.

The panel was moderated by Alex Tabb, Chief Operating Officer and Technology Analyst at TABBGroup, and included DTCC’s own clearing and settlement subject matter experts and strategists, Murray Pozmanter, Managing Director, General Manager, Clearing Agency Services; Dan Thieke, Managing Director, General Manager, Settlement & Asset Services; Tom Sakaris, Managing Director and General Manager of Equity Clearing Services; and Rob Palatnick, Managing Director and Chief Technology Architect at DTCC. The panelists represented 60 years of combined hands-on experience across DTCC’s subsidiaries, the National Securities Clearing Corporation, The Depository Trust Company and the Fixed Income Clearing Corporation.

“DTCC has been at the forefront of driving innovation in the capital markets, and for over 40 years, has been working hand-in-glove with its partners throughout the industry to ensure the U.S. markets are robust, safe and efficient,” Tabb said in his introduction. “And that’s where we focus our conversation today: on innovation, and where the markets are going.”

“Prior to 2008, people primarily looked at the CCPs as a source of operational efficiency and cost-savings,” Pozmanter responded. “Post-crisis, I think people became more acutely aware of the risk management role that CCPs play in the industry, particularly as new regulation has forced additional products into clearing.”

“We are the sole CCP for U.S. cash equity and fixed income products, which affords us the opportunity to centralize, standardize and automate much of the post-trade landscape, from clearance to settlement to asset servicing,” said Sakaris. “We work very closely with our clients to assess changes in the marketplace today. And the markets are very fragmented.”

Thieke reiterated the start date for T+2: September 5, 2017. He updated attendees on the U.S.’s T+2 efforts during the webinar, including the industry white paper, implementation plan and testing plan; endorsements from regulatory bodies and other SROs.

“There is a challenge in being harmonized across the different markets,” he said. “We coalesced around T+2, and although there were discussions if we should go to T+1, there was clear industry consensus on T+2. There are so many segments of the marketplace and getting that consensus and agreement was one of the most challenging aspects of the initiative. We have to take into consideration all constituents in the marketplace when talking about new initiatives.” In addressing new technologies and unanticipated consequences, discussion also turned to Blockchain and if it obviates DTCC’s role in clearing and settlement.

“Blockchain is a really interesting technology that brings a lot of capabilities, and we see our role as enabling new technologies,” said Palatnick, who oversees DTCC’s blockchain effort. “The technology is very new and there are a number of models in play in the industry, across different asset classes. Our goal is to create the right collaboration.”

To view a recording of the recent event, please click here.

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