The Depository Trust & Clearing Corporation (DTCC) 2014 Annual Report, released earlier today, provides insights into DTCC initiatives designed to help the financial services industry navigate a complex and rapidly transforming business and regulatory landscape.
The all-digital report, “Strength Through Transformation,” available on the DTCC website, also outlines DTCC’s corporate strategy and approach, its achievements, financial performance and governance.
“Over the past several years, the industry has been tested by great financial challenges and massive consolidation and retrenchment as well as sweeping changes in market structure,” Executive Chairman Bob Druskin and President and CEO Mike Bodson, said in the report’s Stakeholder Letter. “As we look to 2015, we are confident that we remain headed in the right direction, with the right strategy and team in place to deliver on bold ideas to continue to transform the industry and create lasting value for our clients.”
2014: A Year of Execution
DTCC executed a number of key corporate initiatives in 2014. One of the most important strategic undertakings was a review of DTCC’s legal entity and capital structure, governance practices and ownership framework. The year-long initiative addressed two critical imperatives. The first was to allow DTCC to meet heightened mandates, including higher capital requirements as a result of its three clearing agency subsidiaries being designated Systemically Important Financial Market Utilities (SIFMUs). The second was to provide DTCC with the strategic capital necessary to invest in and develop the type of large-scale shared services that are essential for the industry’s long-term growth.
Other key accomplishments included expanding GTR support for over-the-counter (OTC) derivatives trade reporting to Europe, Singapore, Australia and Canada, and rolling out a new Data Warehouse as part of the Risk Transformation Initiative to serve as the foundation for risk analytics.
“Because our clients are also our owners, our interests and objectives align with theirs,” said Druskin and Bodson. “However, we are committed to bringing a commercial mindset to all of our activities to make certain resources are allocated wisely and operations remain lean and nimble.”
Collaboration Fuels Innovation
The spirit of creativity and collaboration was the catalyst behind three joint ventures – Clarient™ Global LLC, Soltra™ and DTCC-Euroclear Global Collateral Ltd. - all of which launched within just weeks of one another in 2014. These businesses reinforce DTCC’s pledge to deliver on our multi-year commitment to tackle some of the biggest challenges facing the industry today, such as streamlining the collection and management of legal entity data and documents, increasing the resiliency of critical sectors to cyber attacks and creating a more efficient way for firms to allocate and mobilize collateral globally.
“As we look to the future, these businesses provide a blueprint for how DTCC will work with its industry partners to develop integrated solutions that drive down processing costs, reduce systemic risk and minimize duplicative infrastructure investments,” Druskin and Bodson said.
To view the 2014 DTCC Annual Report: