The Legacy Broker and Access Networks: UNPLUGGED
Network Support Costs
To avoid Broker and Access network support costs being assessed it is mandatory that customers:
- Ensure adequate communications connectivity through SMART and/or SFTI. DTCC members using SFTI must connect to at least one access center outside the New York area. These access centers are located in Chicago, Boston and Philadelphia.
- Complete testing of the new pathways.
- Complete full conversion of all input and output for clearing corporation applications directly to/from DTCC through SMART and/or SFTI.
- Cancel the legacy Broker or Access connections.
DTCC’s latest important notice about required network upgrades, issued to customers in mid-April, delivers the message loud and clear: the legacy Broker and Access networks will no longer be supported for clearing corporation applications, and those few customers who continue to rely on them after July 1 will be responsible for their portion of the full cost – expected to be in the millions of dollars – of supporting and maintaining them.
“There are many reasons why it is important to upgrade the network, but chief among them is business continuity planning,” said George Perretti, managing director, Business Continuity Planning, DTCC. “The SEC has mandated that we make certain the industry’s communications infrastructure is resilient and protected from a large-scale disruption. However, until all customers complete these network upgrades, any firm accessing our clearing services through the legacy connections could be exposed – as could that firm’s counterparties. The legacy Broker and Access network connections will not automatically ‘fail over’ to DTCC’s multiple remote processing sites, and therefore, do not meet the regulatory requirements.”
DTCC established operations and staff in multiple locations last year, including locations outside the immediate New York City area as well as outside the region. All of those locations, including multiple data centers, are fully operational, and all critical business functions can be conducted from locations outside the metropolitan area if necessary.
Customers have a choice to migrate their connections either to DTCC’s SMART network, which links these multiple sites, or SIAC’s SFTI network. Firms who choose to use SFTI must connect to at least one access center outside the New York area, either in Chicago, Boston or Philadelphia.
“We had previously stated everyone had to complete the migration from the Broker and Access networks by December 31, 2004. However, it became clear some customers who were working hard against the clock would still have difficulty meeting that deadline. So we significantly increased the resources dedicated to the update, and relaxed the December deadline,” said Jim Umberger, managing director, DTCC Customer Access.
“But now we’re in the second quarter of 2005, and it’s an unavoidable fact: further delays will both prevent DTCC from meeting overall business continuity expectations and also impose significant costs on customers. We need everyone on board.” @