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Latest News from DTCC's 2023 Asset Services Forum

By Antonia Feliz-Redman | 5 minute read | July 14, 2023

Sweeping changes are underway across DTCC’s Asset Servicing landscape, with several modernization and dematerialization projects planned in the next few years. To provide insight into the timeline of these changes and the benefits to clients, DTCC hosted its annual Asset Services Forum in May.

“We encourage input from our industry partners,” said Patrick Barthel, DTCC Executive Director, Asset Services, as he introduced the panel of speakers. “Our yearly forums are an opportunity to present the solutions we have developed in response to that feedback.”

See below for highlights of the key topics discussed:

Managing LIBOR Impact

The London Interbank Offering Rate (LIBOR) benchmark was retired on June 30. For various debt instruments that mature after the cessation date but still reference LIBOR, a fallback rate will be used to calculate interest payments to debt holders. Those impacted by LIBOR cessation are required to communicate an alternate reference rate ahead of the retirement date. In collaboration with the Alternative Reference Rates Committee (ARRC), DTCC created the (LIBOR) Replacement Index Communication Tool as a solution for issuers, agents, and trustees to submit replacement fallback reference rates in a centralized location.

“Replacement rates have been submitted for more than 120,000 securities, but there’s still more work to be done, said Joyce Rosen, DTCC Associate Director, Asset Services.

For details about next steps visit DTCC’s LIBOR Transition site and/or fill out a contact form for further assistance.

T+1 & Corporate Actions

On May 28, 2024, settlement of all U.S. cash equities, corporate debt, and unit investment trusts will move from T+2 to a shortened T+1 cycle. With regards to corporate action events, it is important to understand the expected changes. The events most impacted include stock distributions such as Stock Splits, Spin Offs and voluntary reorganizations with guarantee of delivery features afforded to them like Tender Offers, Exchange Offers and Rights Subscriptions. For distributions, key process changes will be to Ex-Dates and events carrying Due Bills (a.k.a. interim accounting). Given that there is less time to manage the trade lifecycle it is important that for voluntary reorganization events firms understand changes to how they pass liabilities on pending/failing trades around expiration dates and balancing their NSCC/CNS obligations and their DTC settled positions.

Related: The T+1 Implementation Countdown

“We encourage all firms to take inventory and document all changes brought forth by T+1 both internally and externally to account for the impact brought on by the shortened settlement cycle,” said Matt Schill, DTCC Director, Asset Services. In preparation, corporate action testing will take place in DTCC’s PSE-U testing region beginning mid-August 2023, allowing clients to test life-like corporate action events as needed, to acclimate to the shortened settlement environment.

“If any assistance is needed in addressing T+1 limitations ahead of time, we encourage clients to go for more information.

Third-Party Portal

A new third-party announcements portal is being developed for issuers, agents, or any third-party entity working on behalf of the issuer, to engage with DTCC when coordinating the announcement of corporate action events. The new UI will be loosely based off the existing LIBOR Replacement Index Communication Tool. A new announcement creation engine will also be embedded into the UI, granting the ability to third parties to standardize, increase transparency, provide greater straight through processing, and reduce the time for the marketplace to receive event announcement details.

Securities Processing Modernization

Asset Service’s ongoing modernization initiative has been expedited since 2020, with the goal of moving beyond legacy mainframe computing and evolving into distributed technology.

Phase 1 accomplishments, covered by Matthew Popan, DTCC Director, Asset Services, included the launch of the Securities Processing Application (SPA) on March 31, 2023, which unveiled a centralized web-based user experience and retired legacy systems to enhance inventory management. Additional improvements were made for transfer agents, custody participants and business resumption.

“For Phase 2, our scope involves a build-out of electronic transactions, modernizing the Deposit and Withdrawal at Custodian (DWAC) transactions, Direct Registration System (DRS) and Withdrawal by Transfer (WT) withdrawals,” said Jon Ciciola, DTCC Director, Asset Services. “These enhancements will improve navigation, inquiry and downloading capabilities. The functions are being built in succession, with DWAC currently in process. With a targeted mid-September PSE release. We also aim to release a Direct Registration System (DRS) capability in the fall of 2024.”

Dematerialization & Underwriting

To wrap up the modernization topic, Giselle Borrego, DTCC Director, Asset Services, discussed the upcoming Underwriting MMI Program Eligibility updates planned through this year into Q4 2024, with a proposed rapid issuance process which will be foundational to remaining phases of modernization.

Three components are in scope for DTCC’s Underwriting service: Program Eligibility, Rapid Issuance and Intelligent Document Processor. Each component will be built within Underwriting Central and a modernized user interface will also be implemented granting agents and participants self-service request capabilities.


Finally, one of the biggest initiatives at DTCC revolves around dematerialization efforts, which is nearing Phase 3 implementation.

“The challenges presented with managing and issuing physical certificates are plentiful and require an abundance of procedural undertakings and worst-case scenario preparation to mitigate risk as much as possible,” said Michael Ames, DTCC Executive Director, Securities Processing, Global Business Operations.

Dematerialization efforts have resulted in a 49% drop in inventory of physical certificates and the conversion of 19,437 issues and 98,530 certificates since 2016.

The following workstreams are designed to accelerate the dematerialization of physical securities for the next coming phases:

  • Conversion of non-FAST to FAST
  • Direct Registration System (DRS)
  • Destruction of Non-Transferable Securities Certificates)
  • Payment without Presentation (PWP)

“We currently hold $76 trillion is assets for our participants, and $1 trillion as physical certificates,” stated Ames. “For the future, we are looking to partner with the industry – both Transfer Agent and participants – to accelerate dematerialization further.”

Patrick Barthel, DTCC Executive Director, Asset Services
Patrick Barthel

DTCC Executive Director, Asset Services

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