As the clock ticks towards accelerated settlement, over 350 investment managers are now leveraging the automated affirmation capabilities of DTCC’s central matching platform (CTM): which include a new T+1 scorecard to help clients assess their operational efficiency, along with plans for new trade archival capabilities to assist with US reporting obligations.
Post-trade market infrastructure giant, the Depository Trust & Clearing Corporation (DTCC), is seeing an uptick in interest for its automated trade affirmation capabilities, as firms prepare for the move to T+1 settlement coming up in May 2024.
Around 350 investment managers now use the service, while the number of buy-side firms who also leverage CTM’s Match to Instruct (M2i) workflow with a broker/dealer counterpart has increased by 91% since the start of 2023. According to DTCC, those clients are now achieving a near 100% same-day affirmation (SDA) rate by 9pm on trade date.
“It is exciting to see the industry embrace CTM and other DTCC ITP services as critical enablers of T+1,” said Val Wotton, managing director and general manager of DTCC Institutional Trade Processing.
“Clients utilizing CTM benefit from central matching and auto-affirmation capabilities that accelerate the trade lifecycle and are often more efficient when compared to local matching and affirmation by the custodian or institution. With the global financial services industry preparing for the US move to T+1, adoption of CTM and the auto-affirmation workflows continues to increase, along with the realization of its benefits to market participants.”
DTCC recently released a new T+1 scorecard, available through its ITP Data Analytics service at no additional cost to its CTM community. The scorecard allows CTM clients to view the timeliness and efficiency of their operational processes through the lens of T+1, compiling underlying trade data and providing a dynamic dashboard interface with industry benchmarks, trend analysis, and operational metrics such as total trade volume submitted, timeliness of parties submitting trades in CTM, number of manual touches, and timeliness of affirmations by the affirming party.
Also, in early 2024, DTCC will expand its trade archival service ahead of the T+1 implementation for subscribing CTM clients to meet their recordkeeping obligations as a Registered Investment Adviser (RIA) as set forth by the U.S. Securities and Exchange Commission (SEC) adopted amendments to Rule 204-2. The Rule 204-2 amendment requires RIAs that are parties to any transactions subject to the requirements of Rule 15c6-2 (e.g., transactions with SEC-registered brokers subject to SDA) to make and keep records of confirmations received, and allocations and affirmations sent, each with a date and time stamp.
“Given the number of post-trade functions that are impacted by T+1, it is critical that market participants gain an in-depth understanding of their operational efficiency and record keeping obligations as soon as possible,” said Wotton.
©Markets Media Europe 2023
