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2016 A Year of Execution For DTCC2016 may have been “The Year of Surprise” for many, but for DTCC the year marked its continued push to reduce risks, drive efficiencies and foster innovation in the financial services industry.

The top two stories of 2016, according to the Associated Press, were unexpected events that occurred in the voting booth – when the U. S. elected Donald J. Trump as President of the United States in November and Britain decided to leave the European Union (Brexit) in June.

Yet, despite the heightened volatility from those two market-moving events, it was business as usual at DTCC, as the firm continued to seamlessly process trades while providing certainty and stability to the marketplace.

While DTCC continued to fulfill its obligation to keep the post-trade process running smoothly, it also drove innovation in 2016 as the firm positioned itself as a leader on fintech issues and launched new products to support its clients.

One prime example of this is DTCC’s investment in distributed ledgers – an emerging technology that has the potential to transform the post-trade process. DTCC has become a leading voice in the discussion of blockchain, making its mark in 2016 through partnerships and its own research.

Below are highlights of key initiatives and accomplishments at DTCC in 2016.

Risk Reduction & T+2

Risk reduction is at the center of one of the industry’s biggest initiatives – the move to T+2 in the U.S., which will reduce the trade settlement cycle for from three days to two. The shorter settlement cycle will affect equities, including ETFs and ADRs, corporate bonds, municipal bonds and unit investment trusts (UITs).

DTCC has championed this change because of the tremendous benefits it will deliver to individual firms and to the market overall, including reduced operational, systemic and counterparty risk, lower liquidity needs and alignment with other T+2 markets around the world.

Throughout 2016, DTCC focused on testing and readiness by drafting an array of testing documents and scenarios—all with the goal of ensuring a smooth transition to the shorter cycle.

In addition, DTCC gave the green light to convert the firm’s current PSE test environment to a T+2 test environment and build out a new, limited T+3 environment. That conversion will occur over the January 14-16, 2017, three-day weekend.

On the regulatory front, the U.S. Securities and Exchange Commission in September issued its proposed rule amendment for T+2, and DTCC on December 5th responded by submitting a letter in support of the amendment.

To help educate clients and the industry at large about the implementation of T+2 , DTCC organized and participated in a number of industry events dedicated to adoption and awareness, including a well-attended T+2 readiness forum it hosted in October. And DTCC contributed to CAPCO Institute’s Journal of Financial Transformation an article on the history and ramifications of shortening the settlement cycle.

Fixed Income Clearing

The Government Securities Division (GSD) continued to work with regulators on an innovative new service, the Centrally Cleared Institutional Tri-Party Repo ServiceTM (CCITTM). The CCIT service, which is optional for institutional cash lenders, will allow Registered Investment Companies (RICs) and other buy-side cash lenders to join FICC with a limited membership for clearance and settlement of their tri-party transactions with current FICC members. The next step, anticipated in early 2017, is to submit rule filings to regulators, with implementation of CCIT and sponsored membership subject to regulatory approvals.

In the Mortgage-Backed Securities Division (MBSD), development work was completed in the MBS Novation project, with plans to now move into client testing in early 2017. The multi-year initiative is well on track for completion this year, in 3Q. When MBS Novation is complete, clients will be able to use FICC as a single counterparty for all their mortgage-backed securities transactions on a daily basis.

Wealth Management Services

This year saw the culmination of two years of intensive work by DTCC’s Mutual Funds Services group (MF) as it completed the roll-out of a series of product enhancements to help fund companies and distributors comply with new operational requirements in the SEC’s “money market reform,” which took effect in October. The SEC rule amendments, which seek to limit the risks of shareholder runs on money market funds, forced mutual funds and intermediaries to reformulate their money fund line-ups, money-fund systems, operations and commercial strategies.

MF collaborated closely with clients and industry working groups to develop the enhancements, which include new features in Fund/SERV®, Networking and Mutual Fund Profile Service that enable funds to communicate key money fund data, including liquidity fees, redemption gates and multiple net asset value (NAV) strikes. A new user guide and widely attended June webinar helped clients prepare for the new regulations.

2016 also marked a significant DTCC milestone: the 30th anniversary of Fund/SERV, the company’s inaugural offering for the mutual funds industry. MF used this opportunity to tell the story of how Fund/SERV’s automated trading and settlement functions helped transform the funds industry. Fund/SERV launched in 1986 with six clients that together processed 15 orders a day. In 2016, the service supports more than 1,400 clients and processes around 900,000 daily orders.

Besides its work related to money market reform, MF also began to address other service enhancements that will facilitate compliance with the U.S. Department of Labor’s (DOL’s) pending fiduciary rule for retirement-investment advice. The rule, currently slated to take effect in April 2017, is designed to reduce conflicts of interest in the retirement advisory business, ensure advice is in the best interest of the investor, and discourage the use of high-cost, commission-based investment products.

The fiduciary rule also drove much of Insurance & Retirement Services’ (I&RS) product development activity in 2016. While it’s uncertain at this time whether the recent U.S. election could alter the scope and timing of the regulation, the insurance industry is already shifting toward a fiduciary standard in the retirement-savings market. I&RS this past year helped lead the industry’s efforts to deliver the enhanced data transparency this standard will require—first by helping spearhead an industry working group that fleshed out insurance carriers’ and distributors’ needs around fiduciary-related data collection and reporting, then using those findings to map out a design for a new service to be rolled out in early 2017.

The new offering, DTCC Insurance Profile, will provide a centralized repository with standardized, automated processes for populating, retrieving and distributing fee, expense and commission data—at the product level—to streamline reporting and investor disclosures. Over the next few months, I&RS will conduct extensive outreach to the retirement-investment industry about Insurance Profile and other I&RS enhancements that will support the fiduciary standard.

Thanks in part to growing activity in the non-listed real estate investment trust (REIT) and hedge fund space, the Alternative Investment Product (AIP) Services business last year registered 150 million transactions processed since the service’s inception. Also in 2016, DTCC launched a new web interface for AIP to help simplify fund set-up, valuation reporting and order processing.

AIP also released two service enhancements in 2016. One targets compliance with FINRA Rule 2310 and NASD Rule 2340 regarding valuation changes while the second allows fund administrators’ subaccounts to settle money in AIP independently, with no obligation to their administrator. In an ongoing effort to solicit feedback from clients, DTCC hosted its second AIP Summit in June, giving representatives across the alternatives industry an opportunity to weigh in on their ongoing processing needs and priorities for future AIP enhancements.

“It’s been a productive year for WMS,” said Ann Bergin, Managing Director and head of Wealth Management Services. “By collaborating with our industry colleagues, we’ve delivered solutions that firms need to be able to streamline processes and comply with several new and significant regulatory mandates.”

New Data Products

DTCC Data Products, which offers clients value-added services that provide market insights and create efficiencies that reduce costs, developed 10 new offerings that were in high demand in the banking community. Among them was the Liquidity Coverage Ratio Data Service. It was designed to help firms manage their requirements for liquidity facilities and can support commercial paper obligations in order to meet more stringent regulatory capital requirements under Basel III BCBS 238 and other similar mandates from various regulators. The Service offers firms cost-efficient ways to enhance visibility into their obligations.

Separately, DTCC Data Products began offering brokers a new benchmarking product, based on NSCC clearing data, which details their market share in a particular stock on a daily basis. Developed In collaboration with clients, this offering gives clients the ability to uncover metrics to better support their business decisions. Additional products are expected in 2017.


DTCC’s Global Trade Repository (GTR), whose mission is to reduce risk and increase transparency into the OTC derivatives markets, continued its position in 2016 as the leader in market share globally. As an industry-owned utility, and supporting over 6,000 firms globally, GTR, through locally registered trade repositories, has grown to become the largest provider of trade repository services in the world.

Because of its growth and role as an industry-owned market utility, GTR reduced fees for trade reporting to regulators in Singapore and Australia in 2016, with savings as high 20% for some firms based on their volume of trade reporting and/or commitment term. Elsewhere, GTR added trade repository services for Newfoundland and Labrador in Canada, which has separate regulatory jurisdictions in each province. As of November, GTR began supporting all Canadian provinces for OTC derivatives transactions, including rate, credit, equity, FX and commodity derivatives.

In recognition of its outstanding work last year, GTR was recognized by Futures & Options World for the second consecutive year as the European Trade Repository of Year.

DTCC Entity Data

DTCC’s Entity Data Management services give clients the ability to maintain accurate data and documents to improve operational efficiencies and operational risk management in client onboarding, KYC procedures, regulatory reporting and transaction processing. These services include Clarient, Avox Data Services, Omgeo ALERT and the Global Markets Entity Identifier (GMEI) utility.

Along with an expansion to more than 150 clients this year, Clarient Global, LLC, was recognized for its outstanding achievement in information security by being named the 2016 ISE Northeast Project Award winner.

Clarient introduced a a new platform in 2016 to better support the buy-side. The permissioned Base Relationship service, where banks, broker-dealers and institutional clients can exchange and maintain all of the legal entity data and documentation necessary to transact in a single location, gives the buy-side the ability to distribute valuation data in a structured way. It also enables firms to store and link subordinate mandate or sub-fund information and take advantage newly implemented “maker checker” operational controls to ensure data privacy.

Additionally, Clarient has continued to enhance its services to ensure it evolves in tandem with industry needs. Clarient Entity Hub’s PKYC Service, leveraging 2 million legal entity records through Avox, was named Best Reference Data Newcomer by Inside Reference Data. In November, the platform launched PKYC Premium, an enhancement allowing clients to access Principals information directly from the public domain, with no disturbance to the legal entity.


In 2016, Avox Data Services continued to see growth with the validation of more than 2 million entities and was integrated into DTCC’s Clarient Entity Hub platform. These entities serve as the foundation for its PKYC and Base Relationship Services, and they allow for accelerated record creation and reduced disturbance to clients to provide KYC information. For a second consecutive year, Avox was recognized as the Best Entity Management solution at the Data Management Review awards in London.


During 2016, DTCC’s Omgeo ALERT reached significant milestones, with more than 6.6 million settlement instructions and two global custodians live on its Global Custodian Direct (GC Direct) service. ALERT also passed a significant landmark and now contains over 1 million FX & Cash-based SSIs, up 13.5% in 2016. Additionally the service introduced a new program, known as the ALERT Automating SSIs Together (ASSIsT) program, designed to enable broker-dealers to seamlessly onboard their non-ALERT investment manager clients and automate the flow of SSIs between parties. In 2016 Collateral SSIs via ALERT Web was launched, enabling investment managers and brokers the capability to create and maintain SSIs for Collateral movements and providing just in time enrichment of Collateral SSIs in the Margin Transit Utility (MTU). The service also released a third-party enrichment application interface (API), which enables clients and vendors to access SSI data on a real-time, per transaction basis over a secure network.


In 2016, the Global Markets Entity Identifier (GMEI) utility reaffirmed its position as the largest Local Operating Unit (LOU) -- more than three times larger than its nearest competitor. This growth underscores the industry’s confidence in DTCC’s long-standing ability to improve transparency, efficiency and risk mitigation in the global marketplace. The GMEI Utility also redesigned its website ( in 2016, providing a more user-friendly, easy-to-navigate experience in order to help clients obtain LEIs in the most simple and seamless way. Along with a more intuitive design, the new site provides a streamlined registration and renewal process and is better structured to support future growth, such as level II data requirements.