At the second annual DTCC ITP Forum, DTCC executives discussed a range of topics impacting the ITP landscape and the milestones of key industry initiatives.
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See below for a high-level summary of this year’s DTCC ITP Forum.
There were various themes that stood out over the last year, including the high volatility and record-setting volumes that have continued to grow, impact of regulations and obligations related to accelerated settlement and the persistent cost pressures affecting firms. Despite the headwinds facing the industry, several critical strategic milestones were accomplished including:
- Successfully Completing the Migration from OASYS to CTM provided greater settlement efficiency and reduced exceptions.
- Growth in ALERT to capture and maintain standing settlement instructions (SSIs) have helped with overall efficiency as well as fraud prevention related to cash SSIs.
- Expansion of an integrated ITP platform helping to enable a no-touch process for all post-trade activity.
Burden of Market Efficiency
Unprecedented market volumes and preparations for accelerated settlement are pushing the industry to do more – but in less time. Across the globe, these increased pressures are putting a tremendous burden on operations staff. The overlapping cross-regional themes include:
- Improving settlement efficiency with enhanced focus on technology and automation.
- Accommodating affirmation process changes by shifting behavior and operational models.
- Increasing transparency due to the new recordkeeping component proposed by the SEC.
Driving Settlement Finality
The importance of settlement finality has never been more crucial as the industry moves toward shortened settlement cycles. Industry experts discussed the challenges firms are facing and how ITP’s solutions can help through automation.
- Automating the Management of SSI Data: Incorrect SSIs cause fails, leading to the financial impact of Cash Penalties due to CSDR’s Settlement Discipline regime. ALERT’s Global Custodian Direct (GCD) workflow utilizes automation to help solve the issue once and for all, as GCs are able to connect, machine to machine, between their respective SSI repositories and the ALERT SSI utility.
- Accelerating Settlement: Speeding up daily processes to accomplish T+1 will rely heavily on getting correct data. Using faster, automated communications and the elimination of emails and faxes will also help the transition. Additionally, growing usage of the ALERT utility to store and manage SSIs, as well as GC Direct to systemically feed accurate SSI data will greatly assist in support of moving to T+1.
- Monitoring Settlement Statuses to Prevent Trade Failure: Exceptions are more efficiently managed when using solutions such as Settlement Status Manager to significantly reduce fail volumes and overall risk. With its latest release, Exception Manager has expanded its capabilities to include new features based on client feedback, which will provide a single place to capture all settlement activity – not just exceptions.
As we look ahead, there are numerous areas of heightened focus for the ITP business: pushing for operational process harmonization with clients and industry partners, greater adoption of ITP solutions across asset classes, leveraging the available industry assets and tools, and automation to help with expected regulations around T+1 and the proposed requirement for same-day affirmation that will change processes across the entire ecosystem.