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by Karen Rester

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Asian Piece of the GCA Puzzle

DTCC first set up shop in Asia in 2004, opening the Shanghai branch of its Global Corporate Action Validation Service (GCA VS) to complement GCA centers in New York and London. “Our office in China has helped solidify DTCC’s position as a global organization,” said Peter Gleeson, DTCC Managing Director for Asset Services. “To remain competitive and ensure the kind of reliable, round-the-clock service and readiness our clients have come to expect, it is essential we continue to build our presence in Asia.”

Why Shanghai?

“GCA is a 24-hour business,” said Gleeson. “Our clients and the information we gather are located all over the world, so to be effective we needed an on-the-ground presence in Asia.” As GCA processing volumes grew, DTCC gradually doubled its employee base in Shanghai and extended the office’s mandate to support several of DTCC’s core Operations functions. One measure of DTCC’s success in Shanghai is that the office is now fully staffed by local employees and managed by DTCC Director Catherine Deng, one of its first hires.

Making a difference

The Shanghai office strengthens DTCC’s capabilities on multiple fronts, including:

  • GCA VS’s 24-hour “follow-the-sun” service, which means clients receive announcements quickly. “Thanks to our Shanghai team, we’re available from Monday morning in Asia to Friday evening in the U.S., whenever and wherever markets are open,” said Gleeson.
  • GCA VS’s ability to cover the Asian markets on the ground, engage with clients in local languages and establish local contacts to ensure accurate and timely validation of announcements.
  • Access to Shanghai’s large pool of talented professionals and the retention of employees who constitute a pillar of DTCC’s in-house expertise on the Asia-Pacific region.
  • A growing database of procedural knowledge covering every corporate action event in every Asian market, which translates to a detailed understanding of each market’s nuances.
  • Ability of the Operations staff to answer client inquiries arriving late-afternoon U.S. time to ensure faster responses, which mitigates risk on urgent issues.
  • A more robust business continuity plan for DTCC.

Catherine Deng, DTCC Director

Local talent

GCA VS tracks, validates and distributes corporate actions information on roughly 2.5 million securities across 200 countries in 15 languages, and remains the only corporate actions validation service with a global footprint. Today, the Shanghai GCA VS team of 39 employees and consultants processes over half of these events and is responsible for any announcements generated within Asia.

In 2008, the Shanghai office also began supporting DTC’s Redemption Announcements area. Since then, the office has expanded to accommodate a 43-person Operations team that handles processing for a number of core services, including Underwriting, Principal and Interest, Dividends and Reorganization.

Extended workday

One big win the Shanghai office brings DTCC clients is extended hours of service. DTCC now provides 24-hour service for GCA VS, which means faster turnaround for processing announcements. “Anything the U.S. or London centers don’t complete during their business hours is handled by Shanghai,” said Gleeson. Likewise, corporate actions published in Asia can be validated in real time, rather than waiting for teams in the other regions to arrive. “This coverage improves our clients’ ability to communicate with their own clients, which can be important for short election windows,” Gleeson added.

Similarly, with the Shanghai-based Operations team up and running while the U.S. is asleep, DTCC’s workday is extended to 16 hours, which speeds up processing for the core services that the office supports. “We can respond to critical inquiries and create announcements overnight so that clients see a quicker turnaround and the U.S. teams get an earlier start on their work,” Gleeson explained.

Global business continuity

Shanghai has been tested numerous times since 2004, by events such as bombings in London and power outages in New York to the 2010 Sichuan earthquake that severely reduced internet service in Shanghai. Thanks to the office’s robust continuity planning, that earthquake had no effect on DTCC’s clients.

“Service disruptions are not something we treat as an anomaly. We’ve incorporated them into our workflow so that the moment one location experiences a disturbance, another can take over,” noted DTCC Vice President Andrew Barnes, Operations, who managed the Shanghai office for seven years. “Maintaining an Asian presence is a central part of GCA VS’s recovery plan, and thanks to our Operations team, our Shanghai office has extended disaster recovery for DTCC’s core services as well.”

Adding value

DTCC’s presence in China sends a strong message about the company’s commitment to the Asia-Pacific markets, according to Gleeson. And with the region playing an increasingly important role in the global economy, he sees the potential to expand the role of the Shanghai office. “We’re always looking for new ways to leverage the skills of our Shanghai staff to offer greater benefits to our clients around the globe,” he said. @