As part of the Heard at Ops series, Frank La Salla discusses several key DTCC focus areas, plans for shaping the future of the global financial markets and the role of technology, as well as the importance of partnership, to realize this vision. Watch the video and read the Q&A below.
Q. How is this 50-year anniversary for DTCC – and SIFMA Ops – a springboard for the future?
FS: For our 50th anniversary, we’re celebrating our past, but we’re also looking ahead to build the capabilities to play a broader and more impactful role supporting the industry. We’re taking important steps to evolve the organization, refresh our strategy and culture framework and optimize our platform to deliver greater client value and an enhanced client experience.
Now more than ever, technology is transforming operations across financial services, which will dramatically alter how the industry functions and serves clients. Specifically, the interlinkage between front office trading and back-office processing and technology is closer than ever before. Because of this, DTCC can continue to play a central role in bringing the front, middle and back offices together to make financial markets safer and even more efficient and resilient.
Related: DTCC CEO looks toward our future
Q. What are the priorities that DTCC is focused on?
FS: We’re focused on a number of key areas across the business and shortening the settlement cycle from T+2 to T+1 is among the most important for us and the industry. Working in partnership with SIFMA and ICI, we performed due diligence, engaged a broad cross-section of the industry and galvanized support to accelerate settlement. Now that the SEC has established an implementation date, we’re providing support to market participants to ensure a seamless transition. We’re confident that a shorter settlement cycle will deliver real value to the industry by reducing risk, lowering clearing fund requirements, and improving capital and liquidity utilization.
Another priority is the SEC’s proposal to expand access to central clearing for U.S. Treasury transactions. It goes without saying that DTCC is a strong proponent of central clearing, and the SEC’s proposal would represent a dramatic change in market structure – even more significant than the move to T+1. We recognize there are many industry viewpoints on the SEC’s plan, so right now we’re providing thought leadership and transparency and sharing information on how our products and services can support the proposed expansion.
Finally, modernization plays a critically important role in the day-to-day functioning of the global financial markets. When I think about this topic and how we advance our solutions, issues like resilience, fail over and stay, and recovery are top of mind. We need to be prepared for different scenarios, plan for them and be able to react quickly to ensure the continued smooth functioning of the financial markets.
Q. What are the opportunities that are shaping the future of the financial markets?
FS: The opportunities for financial services are enormous, and there is no doubt that digital innovation will play a critical role in reshaping the industry. Technologies like cloud computing, DLT and AI have enormous potential to transform the global financial markets and improve how services are delivered in ways that we can’t even imagine.
During these early days of the digital revolution, it is important that the industry foster greater collaboration, including with technology providers, when exploring how these and other technologies can be leveraged. This is critical to creating the building blocks for future interoperability. We all share a collective goal to reduce risk, improve resilience and help make investing easier and better for the public. If we can harness the power of technology and coalesce the right way, the sky’s the limit.
Frank La Salla is President, CEO and Director of DTCC. He also serves as President and Chief Executive Officer of DTCC’s principal operating subsidiaries, DTC, FICC and NSCC.
Watch La Salla’s session from SIFMA Ops 2023: A Springboard to the Future
This article was originally published to SIFMA on August 7. 2023.