DTCC Connection

Jul 02, 2012 • DTCC Connection

Settlement Processing: System Redesign Brings New Efficiency and Reduced Risk

by Michael Scholl


The Depository Trust Company (DTC) recently gave clients a major user interface upgrade with the successful migration of the Receiver Authorized Delivery (RAD) system to the new Settlement Web platform. The redesigned RAD offers significantly improved capabilities and will further reduce risk in settlement processing.


“The addition of RAD to Settlement Web will allow our clients to leverage new technologies that will reduce their settlement risk and help them operate more efficiently,” said Susan Cosgrove, DTCC Managing Director and General Manager, Settlement and Asset Services.


Following the May 14 migration, all clients seeking to access RAD via screen-based interface will now do so exclusively through Settlement Web. This web-based interface will significantly improve the user experience for clients who have traditionally used the Participant Terminal System (PTS) or the Participant Browser Service (PBS) platforms to perform settlement functions.


Now that RAD is integrated into Settlement Web, DTC will retire this service in PTS and PBS.


Susan Cosgrove, DTCC Managing Director and General Manager, Settlement and Asset Services


What is RAD?


The RAD system permits users to review and either approve or cancel certain incoming receives before they are debited from their accounts.


RAD promotes intraday settlement finality by helping DTC clients avoid reclaims, which occur when a receiver has to return deliveries or payment orders for a variety of reasons.


Enhanced functionality


Cosgrove said the migration of RAD to Settlement Web also allows RAD users to take advantage of new functionality available exclusively via the web platform.


For example, RAD users who access the system through Settlement Web can now approve transactions in bulk for any number of records at one time, saving those users time and resources. RAD screens in the Settlement Web are also more user-friendly and easier to navigate, and the system offers enhanced search capabilities, such as the ability to filter by CUSIP, settlement date, contra-party or asset class, among other categories. Transaction histories going back 21 days are also now available through RAD, and the system now allows users to download transactions to Excel based upon the filters they have selected.


Other benefits


The redesigned RAD now gives receiving participants the option of routing any Omgeo TradeSuite Institutional Delivery (ID) transactions valued at more than $15 million through RAD. Previously all ID transactions, no matter the size, bypassed RAD. The new option will reduce the number of reclaims and reduce the risks associated with receiving large-value ID transactions that previously a receiver had no option to review.

The enhanced system also gives users the ability to allow free money market instrument (MMI) deliver orders to bypass RAD. Traditionally all such deliver orders had to go through RAD, whereas the new bypass option gives users a way to streamline their processing, if they so choose.


“All these changes give RAD users more flexibility and more control over their settlement processing,” said John Kiechle, DTCC Vice President, Settlement Product Management.


Kiechle said the migration to Settlement Web will also lead to reduced costs for DTCC’s clients because DTC will now only have to operate one RAD interface, rather than the two it supported when RAD was offered on PTS and PBS.


The migration occurred simultaneously with RAD’s integration into DTC’s Inventory Management System (IMS). RAD previously operated on a satellite system outside of IMS, but Kiechle said its integration into IMS is expected to help reduce processing risk by reducing the number of handoffs between systems.


Reengineering milestone


RAD’s migration is the latest chapter in the multi-year rollout of Settlement Web. “The RAD implementation is a major milestone in the settlement reengineering plan as we begin to sunset the legacy PTS and PBS platforms,” said Mark Cucarese, DTCC Vice President, Information Services. “The Settlement Web reengineering is a significant component of our overall technology strategy, which moves DTCC systems to more modern, agile and lower-cost frameworks. The result is flexible systems that provide more value to our customers.”


The Settlement Web rollout began in August 2011 with the debut of the platform’s first phase. This initial deployment offered access to some user-friendly features, such as the Navigation Bar, the Settlement Dashboard and a redesigned version of the Activity Research Tool. The second phase took place in February 2012 when Settlement Web began to offer access to the Pending Activity, Position Inquiry and the Risk Management Control Inquiry (RMCI) functions. But use of Settlement Web remained optional, since all of those functions continued to be accessible through PTS and PBS.


For the third phase, which involved the addition of RAD to Settlement Web, DTC’s Settlement Web team took the big step of simultaneously eliminating RAD from PTS and PBS, thereby making use of Settlement Web mandatory for all clients wanting to access RAD via screens. RMCI was also taken off PTS/PBS to prevent discrepancies between RAD and RMCI.


The development of Settlement Web will continue in the coming months and years as more functionality is added to the platform.


Bottom line


“The RAD redesign, along with the migration to Settlement Web, reduces settlement risk for clients, and also gives them greater flexibility and ease of access to our systems, increasing overall efficiency in settlement processing,” Cosgrove said. “Initial feedback from clients on the redesign has been very positive and we expect that the more familiar they become with the new functionality, the more they will like it.” @


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