DTCC Connection

Feb 01, 2011 • DTCC Connection

DTCC Launches Corporate Actions Pilot For New Messaging and Browser Interface

by Edward C. Kelleher


DTCC will launch a pilot program in April for its corporate actions reengineering initiative for both the new ISO 20022 corporate actions announcement messages and its new browser-based user interface.


The pilot, scheduled to commence April 25, will involve leading corporate actions users, including The Bank of New York Mellon and Brown Brothers Harriman, testing the new ISO 20022 announcement messages. The pilot will cover all event types for corporate actions announcements such as cash dividends, tender offers, rights distributions and optional dividends.


“This is a major step forward in DTCC’s reengineering initiative and will literally change the way corporate actions are processed in the United States,” said Patrick Kirby, DTCC managing director, Asset Services. “The pilot marks the beginning of ISO 20022 messaging and lays the groundwork for the eventual transition to ISO 20022 for all firms using DTCC corporate actions.”


Transition period

DTCC is providing a long transition period because of the size and complexity of the reengineering initiative, according to Kirby. “Our goal is to retire all legacy file formats on or before 2015,” he said.


DTCC developed the new messaging documentation in collaboration with SWIFT, a global provider of secure financial messaging services and the ISO 20022 (International Organization for Standardization) Registration Authority.


ISO 20022 provides the financial services industry with a common platform for the development of messages in a standardized syntax and defines a number of key elements used in messaging. Supplementary data that does not fit into the current standard message format, or is specific to a particular country or market, can be added by extending the messages with an additional component. DTCC determined the supplemental information needed in these extensions for corporate actions processing in the U.S.


Browser testing

DTCC’s new browser-based user interface for corporate actions also will begin testing on April 25 as part of the same pilot. The pilot will cover announcements for all event types across distributions, redemptions and reorganizations. Going forward, the browser eventually will incorporate the entire corporate action lifecycle, including elections, instructions and payments. This unified corporate action platform will replace the varied corporate actions functionality in the legacy systems that customers use today.


“The browser’s enhanced functionality will dramatically boost firms’ operational efficiencies,” said Robert Epstein, DTCC vice president, Asset Services. “It will incorporate all event types in one system and encompass the entire corporate actions lifecycle, from announcements through instructions to allocations. This will replace dozens of platforms that our customers use today and allow them to centrally manage all corporate action events through the entire lifecycle in one platform.”


Implementation

DTCC demonstrated a prototype of the browser to hundreds of DTCC customers over the past year and it has received a thumb’s up across the board. The interface will be implemented in phases during 2012 and 2013, with a dashboard for distributions, redemptions and reorgs. @


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