DTCC - The Depository Trust and Clearing Corporation

09/16/2020 | News release | Distributed by Public on 09/16/2020 10:57

SSI Enrichment: A Key Enabler for...

Moira Kiernan, DTCC Director, Product Management for ALERT

DTCC Institutional Trade Processing (ITP) is helping clients realize a no-touch processing workflow whereby reference data is centralized, and enrichment of key reference data occurs just-in-time from golden data sources. Parties then agree on trade economics and standing settlement instructions (SSIs) on the trade date, resulting in an authoritative trade record. Buy-side, sell-side and depositories are notified with the same authoritative instruction and are tracking and resolving any exceptions to ensure settlement finality.

A key enabler of achieving this no-touch processing workflow is ensuring that all clients are enriching their trades with the most up to date and accurate SSIs. DTCC Connection recently spoke with Moira Kiernan, DTCC Director, Product Management for ALERT, to hear about the importance of SSI enrichment and how clients can benefit from it.

DC: What does 'SSI enrichment' mean and why is it important?

MK: With the enrichment process, trades sent for matching in CTM™ are enriched with accurate and timely SSIs and account information from the ALERT® platform.

Through ALERT, clients have access to the world's largest database of golden source account and standing settlement instructions, including support for equity, fixed income, cash, derivatives and collateral SSIs - which can be managed directly by Global Custodians through its Global Custodian Direct workflow. This access allows clients to minimize fails by enriching their trades automatically with the most accurate SSIs.

The provision of accurate and up-to-date SSIs by both parties to a trade improves efficiency in the settlement cycles, can reduce the risk of settlement failure and is a crucial step in achieving a no-touch workflow. This is increasingly important especially when the Central Securities Depositories Regulation's (CSDR) Settlement Discipline Regime (SDR) comes into effect, bringing penalties for failed trades.

DC: What options do clients have to enrich their trades?

MK: There are a number of options available to all CTM clients that enable them to successfully enrich the SSIs they have stored in ALERT on their trades. The most widely used are standard ALERT enrichment or 'smart enrichment' through our new ALERT Key Auto Select (AKAS) service.

With standard ALERT enrichment the user manually provides the appropriate ALERT keys (Country, Method, Security) in CTM. When a trade is submitted to the CTM service for matching, both broker/dealers and investment managers can provide a set of fields, or keys, that activate the enrichment process. These fields enable the selection of the SSI specified by the CTM client and adds this SSI to the trade message in CTM. AKAS, on the other hand, provides clients with a 'smart enrichment' capability that leverages a combination of rules-based logic and client driven profiles to automatically enrich CTM trades with preferred SSIs from ALERT. No manual key entering is needed.

DC: Can you dive a little deeper into what AKAS is and how it works?

MK: AKAS is a free service that clients of both CTM and ALERT can subscribe to that eliminates the need to provide ALERT keys as part of the trade information for enrichment to occur. Essentially, by introducing this smart enrichment capability, AKAS determines the keys for you and automatically enriches trades in CTM with the correct SSIs from ALERT.

AKAS uses CTM trade information to derive country and security type for a transaction and determine the default depository. Clients have the ability to override default choices and indicate settlement location preferences enabling settlements for each security type and geography to be made into and out of a single preferred depository for each account.

DC: How will a client know which enrichment option they should use?

MK: Our goal is that all clients take advantage of enriching their trades one way or the other. Our ideal scenario, and what we are recommending, is that clients use AKAS since the automated nature of it aligns with a no-touch, straight-through processing workflow and standard enrichment still requires manual intervention to submit ALERT keys on a transaction by transaction basis. However, we realize it might not be for everyone and the end of the day it is really about organizational preference and comfort.

Clients should also keep in mind that AKAS derives ALERT keys from the CTM security details and provides that intelligence to ALERT so enrichment is seamless. Organizations may review enrichment results, set further preferences via our override rules and no further involvement is necessary.

Additionally we are happy to work with clients to set up a hybrid enrichment model where they have the option of using AKAS for particular security types and standard enrichment for others.

DC: If a client is ready to enrich their trades, or to sign up for AKAS what should they do?

MK: If you want to talk to someone about enriching your trades or are ready to sign up for AKAS please reach out to your DTCC Relationship Manager or contact [email protected]. You can also learn more on the CTM Enrichment Learning Center page.