The Depository Trust & Clearing Corporation (DTCC) recently reached a critical milestone in rolling out its Corporate Actions Transformation initiative when, for the first time, it received an electronic ISO 20022 instruction message. The transmission signaled the start of end-to-end testing of electronic instructions for distribution event types and is considered a key step towards fully launching the service to clients later this year.
Currently, inbound instructions are communicated by clients to DTCC via manual data entry into the Participant Terminal System (PTS) or Participant Browser Service (PBS) terminal applications. Automating the instruction process by using ISO 20022 messaging will reduce cost and risk for firms.
“It was exciting to reach this point in testing and to take another step forward in delivering a truly cutting-edge system for processing corporate actions,” said Rob Epstein, Vice President, Asset Services. “From an operational standpoint, eliminating a manual process brings gains in efficiency and timeliness as well as mitigating risk. We are encouraging clients to work collaboratively with DTCC as testing continues this year,” he said.
A Deadline Approaches
The enhancement to corporate actions messaging is just one piece of DTCC’s overall transition to ISO 20022. ISO 20022 is the global industry standard for financial messaging, and DTCC is the first financial market infrastructure to adopt this messaging standard for corporate actions processing. The goal of the initiative is to transform corporate actions processing for the financial services industry to improve client efficiency while also increasing security. It is being implemented in several phases over the next three years.
Clients will be required to transition to the new Corporate Actions Web (CA Web) for all PTS and PBS functions that support distribution events as part of this initiative by the June 2014 deadline. Current functions that support these active distribution events are being retired at that time.
Self-paced training is available in ISO 20022 messaging through the DTCC Learning website. Clients are strongly encouraged to train in advance of the deadline so they are well prepared when these functionalities are disabled.
Epstein noted that new developments and other changes regarding the transformation initiative are happening at a fast pace. “The June deadline will be here before we know it, and we want to ensure all clients are aware of not only what is being tested, but also our implementation plans for the coming months,” he said.