New electronic Certificates of Deposit (CD) platform is the latest milestone in the firm’s work to lower risks and costs for market participants by reducing the need for physical certificates
New York/London/Hong Kong/Singapore/Sydney, June 28, 2021 ‒ The Depository Trust & Clearing Corporation (DTCC), the premier market infrastructure for the global financial services industry, today announced the launch of its new Underwriting Central (UWC) platform, an automated service for electronic Certificates of Deposit (CD) offered by DTCC’s subsidiary, The Depository Trust Company (DTC).
The new, digital UWC platform provides a paperless process for the delivery of CDs, increasing efficiency through automation, improving data quality, reducing risk, and providing greater transparency into the eligibility life cycle. It also represents an important step in bringing the industry closer to achieving full dematerialization.
With DTC’s new UWC platform, issuers can now streamline the underwriting process, seamlessly creating, signing, and delivering CDs within hours, instead of days or weeks. The new platform leverages electronic vaulting technology to transmit and store data, as well as an e-signature process to execute digital certificates, providing enhanced automation for CD eligibility and issuance processing, and ultimately providing more seamless delivery of these assets to the accounts of end clients.
The launch of the new electronic CD platform comes following a successful pilot with nearly 30 underwriters, including BNY Mellon Capital Markets, LLC., Fidelity Capital Markets and Multi-Bank Securities, Inc., as well as more than 50 issuers from regional branches based across the U.S., including BLC Community Bank (Little Chute, WI) and Luana Savings Bank (Luana, IA).
“The new electronic CD capability reduces the risk of potential disruptions in the physical transport and in-person delivery receipt of CDs, all challenges that were amplified during the shift to remote working as a result of the COVID-19 pandemic,” said Ann Marie Bria, DTCC Executive Director, Asset Services Business Management. “This new paperless process eliminates shipping costs and manual processes and the risk of closing delays for the issuer.”
The delivery of the UWC platform is part of DTCC’s larger effort to fully dematerialize all physical securities to create a more cost-effective, secure and efficient marketplace, as outlined in a whitepaper delivered to the industry last year.
“Thanks to a significant collaborative effort with our clients, we are now one step closer to achieving full dematerialization,” added Ann Bergin, DTCC Managing Director and General Manager, Wealth Management Services and Asset Services. “Having a robust, automated process with fewer operational touchpoints is already introducing major benefits to our clients, including increased transparency, cost savings, improved resiliency, and lower risk.”
In addition to this effort and in support of dematerialization, DTCC is also working on efforts to address other paper-based asset classes at their issuance, such as Corporate Debt, as well as existing securities that are eligible at DTC. Today, less than 1% of assets serviced through the depository are still in physical form, but they represent $700 billion dollars in value.
The Depository Trust Company (DTC), DTCC’s central securities depository subsidiary, provides settlement services for virtually all equity, corporate and municipal debt trades and Money Market Instruments in the U.S. In 2020, more than $211 billion in retail Certificates of Deposit were processed through DTC.
With over 45 years of experience, DTCC is the premier post-trade market infrastructure for the global financial services industry. From 21 locations around the world, DTCC, through its subsidiaries, automates, centralizes and standardizes the processing of financial transactions, mitigating risk, increasing transparency and driving efficiency for thousands of broker/dealers, custodian banks and asset managers. Industry owned and governed, the firm simplifies the complexities of clearing, settlement, asset servicing, data management, data reporting and information services across asset classes, bringing increased security and soundness to financial markets. In 2020, DTCC’s subsidiaries processed securities transactions valued at more than U.S. $2.3 quadrillion. Its depository provides custody and asset servicing for securities issues from 170 countries and territories valued at U.S. $73.5 trillion. DTCC’s Global Trade Repository service, through locally registered, licensed, or approved trade repositories, processes 15 billion messages annually. To learn more, please visit us at www.dtcc.com or connect with us on LinkedIn, Twitter, YouTube and Facebook.