There are several large-scale modernization programs underway across DTCC, designed to deliver automation improvements that will benefit clients and stakeholders. DTCC’s new position paper, “Automating the Sourcing of Corporate Announcements from Agents and Issuers,” outlines several solutions that are in development at DTCC to transform certain manual processes that are deeply embedded within Corporate Actions, including automating touchpoints in the securities lifecycle and enhancing collaboration between DTCC and external parties.
DTCC’s paper follows on the heels of recent research from SIFMA’s Operations & Technology Committee and Ernst & Young LLP, “U.S. Corporate Actions Standardization Position Paper,” which delivered a call to action to modernize and standardize Corporate Actions event processing for industry members and investors. Additionally, ISSA’s paper, “Corporate Actions Data Sourcing – The Case for a Standardized, Automated Single Source Model”, focused on the same challenges from a global perspective. While the SIFMA and ISSA papers highlighted the need for greater automation, DTCC is looking for specific ways this can be achieved, especially within a more collaborative and automated Corporate Actions structure.
DTCC’s paper proposes the development of two new platforms:
- A modernized GUI interface / portal that provides templates for each Corporate Action event type that Agents and Issuers can use when transmitting event information to DTCC.
- Standardized automation via API / messaging, which will use the same templates as the DTCC portal and will allow for two-way accessibility for Issuers and Agents to confirm missing event data.
The workflows embedded within Corporate Actions result in more than 3.7 million event announcements annually, and currently, the process of announcing and allocating Corporate Actions events involves a significant amount of manual back-and-forth communication and coordination between The Depository Trust Company (DTC) and external parties.
“DTCC is well-positioned to help improve these inefficiencies and change how Agents and Issuers interact to deliver even more timely and accurate Corporate Actions Announcements,” said Ann Marie Bria, DTCC Managing Director, Asset Services. “DTCC has spent the last 13-plus years adopting global market standards and creating widespread adoption to the ISO 20022 standard. Given that the U.S. market is communicating Corporate Actions information using this standard, DTCC believes this model should also be used to receive this information directly from the agent entity source.”
As the paper highlights, DTC has supported certain Corporate Actions processes for almost 50 years, but even as the complexity of events and the data contained in announcements have evolved, the processes themselves have not changed considerably.
“Our goal is to bring to market an isolated testing environment in the coming months where users can submit announcements, but without affecting the production application,” said Patrick Barthel, DTCC Executive Director, Asset Services. “Ultimately, the objective is to revamp the processing structure to provide a more reliable, sustainable, and secure foundation for the future processing landscape.”
Read DTCC’s position paper here.