As the U.S. transitions from the implementation of T+1, several other initiatives impacting the global financial landscape have emerged including digital assets, cybersecurity/ransomware and the implementation of the expanded treasury clearing mandate just to name a few.
Keeping a finger on the pulse of what is going on in Washington, D.C. and other jurisdictions is a daunting task. Justin McCorvey, DTCC Director, Global Government Relations, sat down with DTCC Connection, to discuss how DTCC’s Government Relations team works collaboratively with lawmakers, regulators, trade associations and other key stakeholders in the U.S., Europe, Asia and Australia to help shape sound public policy on the critical issues that impact both global and regional financial markets.
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DC: As U.S. markets continue to make the necessary adjustments to remain in compliance with new regulations, what are some key insights gained from the U.S. T+1 implementation that can be leveraged by the EU/UK as they consider making the move to a T+1 settlement cycle?
JM: Communication was key throughout the lead up to the U.S. transition to T+1. As the EU/UK continues to chart a path towards implementation, it is critical that firms communicate early and often with key stakeholders and consider what readiness will look like. To help facilitate that communication, DTCC’s U.S. Government Relations (GR) team developed a stakeholder engagement strategy, which enabled the team to leverage DTCC subject matter experts in educating and informing key policymakers on the impact of the move on the markets and the steps DTCC was taking to ensure a smooth transition.
DC: With the SEC’s Treasury Clearing mandate being finalized, how is DTCC helping legislators and regulators prepare for the anticipated implementation of the mandate?
JM: Like the DTCC Government Relations team’s strategy leading up to the implementation of T+1, we have worked closely across the business—specifically FICC—to ensure that we are educating legislators and regulators alike on the implications of the mandate and how it will impact the overall financial markets. FICC has done an excellent job helping the DTCC GR team highlight the pivotal role that DTCC has in ensuring policymakers that our firm is more than capable and ready to help firms comply with the mandate and keep the markets working effectively and efficiently.
Additionally, FICC has done an excellent job with helping us highlight the pivotal role that DTCC has in ensuring policymakers that our firm is more than capable and ready to help firms comply with the mandate and keep the markets working effectively and efficiently.
Laura Klimpel, DTCC’s Head of FICC, often highlights that this mandate does not represent a seismic change for DTCC but more of an incremental expansion of the large scale, resilient, battle-tested services that FICC has provided the Treasury market for nearly 40 years.
DC: The U.S. Presidential election could bring a potential shift in political power. What impact will a new administration have on policy impacting the financial services industry?
JM: As with any new Presidential election, there is the potential for a shift in political power across branches of government. Unfortunately, we do not have a crystal ball that will allow us to predict the 2024 Presidential election; however, we will do our due diligence to ensure that we are preparing for whatever the outcome may be.
Generally speaking, with the Supreme Court’s recent decision in the case of Loper Bright Enterprises vs. Raimond (which overturned the Chevron doctrine), the ultimate rulemaking power that was once with the regulatory agencies has now been transferred to the legislative and judicial entities. Because of this, we could see a plethora of legislative rulemaking that could impact the financial services industry as a whole.
Regardless of the outcome in this year’s election, the GR team will continue to work diligently with members on both sides of the political aisle, newly elected and tenured to ensure they understand our priorities and how we are serving the global financial markets each day.