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DTCC Announces Plans to Reduce MMI Settlement Processing Risk

The changes scheduled to be implemented in May 2012 will:

  • Advance the cutoff time for submitting new valued MMI issuances to The Depository Trust Company (DTC) to 2:00 p.m. from the current 3:20 p.m.
  • Advance the cutoff time for receivers of new valued issuances to approve MMI issuance deliveries to 2:45 p.m. from the current 3:30 p.m.
  • Require that all MMI transactions, regardless of transaction value, go through the Receiver Authorized Delivery process.

Next up on the MMI agenda is further evaluation of the possible long-term structural changes discussed in the task force’s report. Some proposals under consideration include:

  • Creating an MMI matching process that would match an issuer’s new issuance credits to offset its own maturity obligations.
  • Separating MMI and non-MMI transactions for settlement purposes.
  • Creating multiple MMI settlement processing cycles to further intraday finality.