The World of Derivatives: Reporting Across Borders
2019 was a year of expansion and enhancements to our Global Trade Repository (GTR) service. In Switzerland, we attained recognition as a Foreign Trade Repository, allowing us to support derivatives reporting under the Swiss Financial Markets Infrastructure Act (FMIA), also known as FinfraG. In addition, we unveiled a new portal for clients in the APAC region to make it easier for them to access their data—an important initiative that aligned with the expansion of new reporting requirements to buy-side firms by the Monetary Authority of Singapore (MAS). In Europe, we navigated the political waters of Brexit, making sure firms would be able to meet their derivatives reporting mandates in the EU and UK.
Building Our MTU Community
With the continued rollout of uncleared margin rules globally, our community of users on the Margin Transit Utility (MTU) grew to nearly 50 firms connected to the platform including the leading dealers, investment managers, administrators and custodian firms. This demonstrates our solution to automate margin settlement is filling a critical client need as the evolving regulatory landscape continues to impact the industry. Our decision to integrate MTU into our Institutional Trade Processing (ITP) business will help us deliver a more streamlined process for clients in the coming years by providing firms with more holistic settlement management support across multiple asset classes.
ITP: Going for Gold
Our Institutional Trade Processing (ITP) business issued a white paper, Re-Imagining Post-Trade: No-Touch Processing Within Reach, outlining our vision for an open, post-trade infrastructure that eliminates many redundancies and reduces manual processing across asset classes from post execution to settlement finality, centralizes golden source data and provides the ability to materially reduce failure rates. To realize this vision, we announced plans to decommission the OASYS platform in 2021, setting a new path for a more seamless, automated trade matching and confirmation platform. As a result, clients will experience an improved central matching workflow, more robust settlement notification functionality and an increased ability to leverage ALERT enrichment. To further enable and encourage the movement of US volume, ITP achieved functional parity and harmonized pricing between OASYS and CTM.
SSI: Breaking Down Barriers
We took aim at overly long settlement cycles and trade fails caused by missing or inaccurate standing settlement instructions (SSIs) with the launch of a new smart enrichment capability called ALERT Key Auto Select (AKAS) last year. This service leverages a combination of Securities Market Practice Group rules-based logic and client-driven security profiles, enabling firms to agree to leverage ALERT’s SSIs and identify place of settlement for a trade automatically, thereby reducing or eliminating manual touch points and trade exceptions. The result is a no-touch process that locks in preferred place of settlement on trade date.
SSI: Paving the Way Forward
A variety of challenges with standing settlement instructions (SSIs), including human error due to manual processes, contribute to the high number of trade exceptions and fails. Solving this problem requires automating the input and maintenance of SSI data and creating an optimal custodian-managed workflow—an initiative we’re advancing by leveraging the DTCC ALERT platform. We shared our approach with the industry last year, A Roadmap to Automation, which showcased how automation via a centralized SSI utility will unlock increased cost savings, data quality and timeliness for the industry.
Delivering Greater Value to Clients
On the heels of implementing a new pricing strategy for our SIFMU businesses (DTC, FICC and NSCC) in 2018, we set our sights last year on delivering similar benefits to clients of Repository & Derivatives Services, Institutional Trade Processing and Data Services. The result is a simplified, value-based fee structure that increases transparency, reduces complexity and promotes industry efficiency. Looking forward, we intend to use this same approach when pricing our newest offerings, including our service to support Securities Financing Transactions Regulation (SFTR) and our new Report Hub.