DTCC Connection

For the fourth year in a row, The Depository Trust & Clearing Corporation (DTCC) has been named “Best Sell-Side Clearing Provider” by Waters Technology in the magazine’s 15th Annual Waters Rankings.

Based on votes by the magazine’s readers, the Waters Rankings recognize the financial services industry’s leading technologies, services and providers and remain one of the most prestigious awards due to its ranking methodology. Waters Rankings 2017 had over 2,000 submissions, with end-users representing a large part of the financial services industry voting over a six-week period to determine the winners.

The rankings featured 30 categories under the five banners of Trading Services, Trading Tools, Data Management; Compliance, Risk Management & Back Office; and Infrastructure & Connectivity. DTCC earned its award in the “Trading Services” area of specialty.

In its coverage of the awards, Waters recognized DTCC for not only being the leading provider of clearing services for equities and fixed income transactions, but also for continuing to expand its core competencies, portfolio of services and technological capabilities across the globe.

Waters mentioned the launch of the Centrally Cleared Institutional Tri-Party (CCIT) service by DTCC’s subsidiary, the Fixed Income Clearing Corporation (FICC)—a key achievement for the firm. The service provides risk reduction and potential capital relief for the tri-party repo market. The service was created in response to the U.S. Securities and Exchange Commission’ (SEC) approval of rule changes that allow institutional investors to participate directly with the clearinghouse through CCIT membership. CCIT went live on June 29, executing its first trade between Morgan Stanley and Citadel.

“Our strategy is one of helping firms cope with the new regulatory environment by expanding access to clearing to a wider group of market participants,” says Murray Pozmanter, DTCC Managing Director and Head of Clearing Agency Services. “For FICC in particular, in order to help preserve liquidity in the market, our aim is to widen participation in clearing, whether it be directly or indirectly. This will allow the current participants in clearing to optimize their capital usage.”

Pozmanter also said that DTCC will continue to expand its buy-side fixed-income offerings and explore options of expanding it into the organization’s equities operations.

Besides the launch of the CCIT service, Waters also highlighted DTCC’s leadership in the move to the T+2 settlement cycle, with plans to work with the financial services industry toward the option of T+1 and even T0 settlement cycles. Further, DTCC was recognized for its continuing leadership and efforts toward the development of distributed ledger technology in partnership with Digital Asset Holdings. The two firms collaborated and completed a successful proof-of-concept for managing clearing and settlement of U.S. Treasury, Agency, and Agency Mortgage-Backed repurchase agreement (repo) transactions. The second phase of this project is now underway, which involves ensuring the solution meets industry requirements and DTCC’s technology performance and integration conditions.

Safeguarding the industry, DTCC processes 100 million transactions a day, representing over $4 trillion of market value in securities. Over the course of the past year, DTCC’s core processing engines handled more than $1.5 quadrillion in financial transactions.