DTCC Extends Timeframe to Test New Underwriting Platform
In response to customer requests for additional time to test and use the newly reengineered underwriting system, DTCC has extended the mandatory implementation date for underwriters of new issues from September 2007 to April 1, 2008.
The implementation schedule for the New Issue Information Dissemination Service (NIIDS), a component of the platform that will disseminate information on new issues in real time to the industry, has also been extended. Now, NIIDS implementation is expected to become mandatory in mid-2008, subject to a decision by the Municipal Securities Rulemaking Board (MSRB).
DTCC will launch the platform, including NIIDS, on schedule at the end of September and underwriters have the option to begin using it at that time.
Testing the waters
Called the Underwriting SOURCE (Securities Origination Underwriting & Reliable Corporate Actions Environment), the new platform will fundamentally streamline the process by which underwriters submit new-issue eligibility requests to the Depository Trust Company (DTC), a DTCC subsidiary. The NIIDS component will help broker/dealers meet regulatory requirements for the prompt reporting of bond trades.
“For the past year, we’ve focused on customer readiness and are in the process of working with 25 customer firms to test the new Web application,” said Denise Russo, DTCC director, Asset Services. “We also are working closely with the vendors and will be scheduling tests between certain vendors and selected customers in upcoming months. During this test period, customers will have the option of using the new platform to submit new-issue eligibility requests. They can also begin to use and familiarize themselves with NIIDS,” said Russo.
The new timeline for NIIDS reflects the MSRB’s decision to postpone the service’s mandatory implementation. Although the MSRB has not yet issued a mandatory date for the NIIDS implementation, it is expected for mid-2008. Initially, the industry anticipated MSRB to mandate NIIDS for its member firms effective January 1, 2008.
“We urge all municipal underwriters to start working with NIIDS as soon as possible so they’re ready to meet the MSRB mandate when it’s issued,” said Russo. She cautioned that during the test period, no one should rely on the NIIDS data elements disseminated though DTC. Rather, firms should continue to use existing authorized sources for this information.
During this extended test period for NIIDS, DTC will accept file transmissions from an underwriting firm or from the underwriter’s book running vendor. Firms can continue to use the current processes for making an issue DTC-eligible with hard-copy questionnaires or submissions via the Participant Terminal System’s PUND application or the Web applications, WUN. @
[For more information on the new underwriting system, visit www.dtcc.com/reengineering or contact Denise Russo, DTCC director, Asset Services, at drusso@dtcc.com or 212.855.3731.]