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As part of its ongoing mission to provide clients with the highest level of customer service, DTCC annually surveys clients to solicit feedback on how well the company is meeting their needs and ways in which it can further increase satisfaction and enhance its value proposition to the industry.

This week, in a continuing series focusing on DTCC’s client service efforts, Robert Cavallo, DTCC Director, Settlement Product Management, speaks with @dtcc about improvements his team instituted to Settlement Services at DTCC.


Q.     In terms of Settlement Services at DTCC, what was the overall tone of the feedback from the Customer Satisfaction Survey? 

A.     We learned our clients are extremely satisfied with the services they receive in the settlement space. This year’s survey revealed an overall satisfaction score of 95% as it pertains to the services and products that are offered.

Q.     What were the common themes identified by clients in the survey?

A.     Two themes consistently presented themselves:

  1. Small- to mid-tier clients said that they would like to have more participation in the settlement space.
  2. Clients want increased transparency and more communication as it pertains to settlement-related initiatives.

Q.     How did DTCC increase diversity in the settlement space?

A.     We added three new clients to our DTC Settlement Advisory Board this year to help cultivate a broader representation of firms that are helping share our discussions and provide some new perspectives. These firms include Raymond James and Jefferies from the broker/dealer side and US Bank from the custodian side that joined the Board in 2013.  This committee is a combination of broker/dealers and custodians that meets three times a year to collaborate on settlement-related topics.  Having a more diverse client base involved in these discussions gives DTC a better understanding of how these topics affect different clients and their systems/vendors.  

Q.     What did DTCC do to increase transparency and communication in settlement-related initiatives?

A.     We have a pretty active pipeline. There are two major settlement initiatives, Settlement Matching and Money Market Instrument through Finality, that we are working on that will span multiple years. We feel it is very important to get as much information as possible to our clients on these two topics as they will have major impacts on how transactions are processed at DTC. With that in mind we have implemented a multi-pronged approach to deliver the information necessary to our clients. We have leveraged industry associations such a SIFMA, CPIWG, BDUG, AGC, RMOA, and AMF to help reachi as many of our clients as possible. We conduct regularly scheduled phone calls that are open to all clients (participation has been robust with over a 100 people on each call).  We also have dedicated pages on our website that provide pertinent information on these key initiatives.  Our relationship managers reach out to clients through a number of in-person meetings to cover these two topics.  In addition we have utilized our Settlement Advisory Board to get our message out.

Q.     What other projects are you undertaking to enhance Settlement Services?

A.     We are planning to fully implement the Settlement Matching initiative this year.  Settlement Matching will fundamentally alter the way securities transactions in equities, corporate debt and municipal debt securities are settled in the U.S.  The initiative will not only enhance intraday settlement finality, but it will substantially reduce systemic credit and liquidity risk for our clients by eliminating transactions that can override DTC’s risk management controls. Subject to SEC approval, this July we plan on subjecting all payment orders and non-institutional valued deliver orders to counterparties to the Receiver Authorized Deliver System (RAD).  We’ll follow with institutional deliveries later in the year. 


We recently published a detailed plan to improve intraday settlement finality and further reduce credit and liquidity risk in the money market instruments (MMIs) market. The enhanced settlement model will eliminate risks associated with intraday reversals of transactions in DTC’s MMI system that are the result of an issuer failure. Subject to regulatory approval, the proposed changes are detailed in a service description paper entitled “Increasing Certainty and Promoting Intraday Settlement Finality." DTCC continually examines how to reduce risk further in the financial system and the proposed changes to MMI transaction processing aim to help eliminate the credit risk that Issuing Paying Agents (IPAs) still face today. The proposed changes are targeted for implementation in the fourth quarter of 2015.


We are also looking to make enhancements to our optional Memo Seg service. This service has benefitted the industry well over the years and has provided clients with a tool that allows them to properly segregate securities that they are holding at DTC for their fully paid for customers. Because of recent regulatory changes, our clients have requested additional functionality be added to the platform that would allow them to adapt to the new requirements.

In keeping with the theme of upgrading existing platforms we are in the process of retiring our legacy PTS and PBS platforms. This has been a multi-year initiative to migrate processes from the PTS and PBS mainframe to our Settlement Web portal. 


For more information:

DTCC Settlement Services

Money Market Instrument Finality Through Optimization

Increasing Certainty and Promoting Intraday Settlement Finality