DTCC Connection

Oct 01, 2012 • DTCC Connection

ISO 20022 Pilot Marks Another Corporate Actions Milestone


by Edward C. Kelleher


DTCC launched a new corporate actions pilot program in September, testing ISO 20022 messages that cover the entire lifecycle for distribution events. The testing started with entitlements and payments and will move on to instructions.


The pilot is part of DTCC’s multi-year corporate actions reengineering initiative that will replace DTCC’s proprietary files with ISO 20022 messages. ISO 20022 provides the industry with a platform for the development of standardized corporate actions messages.

“This pilot represents phase three of our reengineering initiative and is yet another milestone in reengineering corporate actions processing in the U.S.,” said Daniel Thieke, DTCC Managing Director, Asset Services.


Four leading corporate actions users are participating in the pilot: BNY Mellon, Brown Brothers Harriman, JPMorgan Chase and National Financial Services.


Outbound, then inbound


For the first 12 weeks of the pilot, DTCC will send out sample ISO 20022 messages to the pilot participants, giving them the information they will need to develop coding for the new messages. In Q1 2013, DTCC will move into production and begin sending the ISO messages in an automated fashion, alerting the test participants to principal and income payments and related information, and allowing them to do further testing.


Also in 2013, DTCC will be ready to take inbound ISO 20022 messages for election processing on events currently eligible for DTCC’s Elective Dividend Services (EDS). EDS enables DTCC clients to view and send a variety of election instructions to DTCC for processing. “This will mark the first time DTCC is able to take inbound customer ISO 20022 messages for distribution events,” said Thieke. “It’s a milestone because it will further reduce risk and cost in corporate actions processing and move us closer to greater straight-through processing in securities operations.”


A single interface


Another major undertaking of the initiative will be to begin the mandatory migration of all DTCC participants to the new browser-based user interface for distribution events in 2013. The new browser, which will replace DTCC’s Participant Terminal System (PTS) and Participant Browser Service (PBS), will provide a single unified corporate actions platform that will incorporate all event types. DTCC will give customers a series of training sessions and webinars on the new interface prior to implementation.


“We’ve been conducting webinars and testing the new browser-based user interface for the past year, and client feedback has been extremely positive,” said Thieke.


Steady progress


In the first two phases of the reengineering initiative, DTCC upgraded its new user interface platform to support additional data. In addition, DTCC worked with SWIFT, a global provider of secure financial messaging services, to develop and publish a suite of corporate actions messages in the ISO 20022 format. The effort included the launch of the first pilot program testing ISO 20022 corporate actions announcements in April 2011 and implementation of the messages in November 2011.


“We now have all the necessary elements for corporate actions processing on one platform, making processing less risky and much more efficient,” summed up Thieke. @


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