Regulatory compliance is a key issue for market participants across the post-trade space. New regulations have led to significant mandates on financial firms while recent geopolitical events continue to create uncertainty.
We continue to work with our clients to help them understand how new and existing regulations, such as the Central Securities Depositories Regulation (CSDR) and accelerated settlement efforts globally, can affect their post-trade processes, and offer solutions to address these various challenges.
As the financial industry turns its attention to accelerating the U.S. securities settlement cycle to T+1, the spotlight is on post-trade automation to help firms prepare. In February 2023, the SEC announced the final implementation date of May 28, 2024, for the US move to T+1 settlement for equities transactions requiring institutional trades to be allocated, confirmed, and affirmed as soon as technologically practicable and no later than by the end of trade date.
To accelerate settlement, post-trade allocation, confirmation, and affirmation need to happen faster. ITP services enable operational efficiency to meet T+1 by providing central matching of cross-border and domestic trades, with workflows that automatically trigger trade affirmation and delivery of DTC-eligible securities directly to the DTC for settlement when a trade match between an investment manager and executing broker occurs. Our services also enable automatic trade enrichment with golden-sourced data and the tracking of settlement statuses, allowing for seamless connectivity through the settlement lifecycle to reach settlement finality. ITP also offers a new analytics solution which presents dedicated metrics and data points to identify areas of improvement in your post-trade lifecycle.
CSDR aims to harmonize post-trade processes and financial markets infrastructures in the European Union. CSDR impacts all types of firms that trade in the European Union and EEA, regardless of where they are located. To achieve this goal, CSDR has established the Settlement Discipline Regime (SDR) that will enforce mandatory penalties for failed trades.
Prevention of failed trades is key to avoiding penalties. DTCC’s ITP services help support CSDR compliance, minimizing the risk of trade failure by ensuring that clean and accurate golden source data are used to create an authoritative trade record, automated processing through a no-touch workflow and efficient exception management.