2 What Reengineering Project? Underwriting Corporate Actions Security Master Files.
Dec 15, 2015
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2
What Reengineering Project?
Underwriting Corporate Actions
Security Master Files
3
A Bit of History
•Transforming Corporate Action Processing outlined DTCC’s strategy to help firms manage risk, reduce cost and achieve greater levels of STP
•Municipal Operational Underwriting Process and Corporate Operational Underwriting Process documented the operational underwriting process in plain English Guides
•Transforming Corporate Action Processing outlined DTCC’s strategy to help firms manage risk, reduce cost and achieve greater levels of STP
•Municipal Operational Underwriting Process and Corporate Operational Underwriting Process documented the operational underwriting process in plain English Guides
4
Reengineering Objectives
•Common Platform for Underwriting and integrated Corporate Action Processing
•Improve Customer Service by offering greater operational flexibility
•Streamline Processes and eliminate redundancies
•Reduce Risk through increased automation
•Common Platform for Underwriting and integrated Corporate Action Processing
•Improve Customer Service by offering greater operational flexibility
•Streamline Processes and eliminate redundancies
•Reduce Risk through increased automation
5
Reengineering Objectives
•Support International Standards and Best Practices
• ISO 15022 compatible
•Multi-currency enabled
•Support international numbering systems
•Support International Standards and Best Practices
• ISO 15022 compatible
•Multi-currency enabled
•Support international numbering systems
6
Current Underwriting Platform
•Does not capture all fields required to service security over its life
•Relies upon single security identifier
•Implemented over twenty years ago
•Consists of over six distinct customized sub-systems
•Does not capture all fields required to service security over its life
•Relies upon single security identifier
•Implemented over twenty years ago
•Consists of over six distinct customized sub-systems
7
Current Corporate Actions Platform
•Consists of over sixty distinct customized sub-systems
•Many implemented over twenty years ago
•Sub-systems individually maintained and have been significantly altered over time
•Relies upon single security identifier
•Consists of over sixty distinct customized sub-systems
•Many implemented over twenty years ago
•Sub-systems individually maintained and have been significantly altered over time
•Relies upon single security identifier
8
Current Corporate Actions Platform
•Batch processing mostly end-of-day
•Proprietary formats
•Unique procedures (e.g. contra-CUSIP, envelopes)
•Hard-coded processing rules
•Batch processing mostly end-of-day
•Proprietary formats
•Unique procedures (e.g. contra-CUSIP, envelopes)
•Hard-coded processing rules
9
Underwriting System Processes
•Underwriting Announcements
Capturing and maintaining Underwriting event information
•Eligibility
Review process to determine if issue can be DTC eligible
•Packaging
Establishing DTC inventory for the new issues
•Underwriting Announcements
Capturing and maintaining Underwriting event information
•Eligibility
Review process to determine if issue can be DTC eligible
•Packaging
Establishing DTC inventory for the new issues
10
Underwriting System Processes
•Closing
Crediting Underwriters with position once issue closes
•Post Closing Activities
Gathering and verification of asset servicing features
•Closing
Crediting Underwriters with position once issue closes
•Post Closing Activities
Gathering and verification of asset servicing features
11
Master File Changes
•Consolidate multiple Security Master Files within DTCC into one common structure
•Elimination of sub-issue types that drive processing and don’t describe the security
•Enhanced Support for Asset Services features
•Consolidate multiple Security Master Files within DTCC into one common structure
•Elimination of sub-issue types that drive processing and don’t describe the security
•Enhanced Support for Asset Services features
12
Corporate Action Processes
•Announcements
Capturing and maintaining of event information
•Entitlements
Identifying eligible participant positions and calculating the entitlement
•Response Capture
Processing of all Corporate Action instructions
•Announcements
Capturing and maintaining of event information
•Entitlements
Identifying eligible participant positions and calculating the entitlement
•Response Capture
Processing of all Corporate Action instructions
13
Corporate Action Processes
•Reconciliation Balancing entitlement positions,
pre-balancing cash payments and resolving out of balances
•PaymentsReceipting and allocating event
proceeds; post allocation bookkeeping
•TaxCreating and Maintaining
information to support tax elections
•Reconciliation Balancing entitlement positions,
pre-balancing cash payments and resolving out of balances
•PaymentsReceipting and allocating event
proceeds; post allocation bookkeeping
•TaxCreating and Maintaining
information to support tax elections
14
Top “10” Highlights
1. Security Master File will works in unison with Underwriting and Corporate Actions2. Common rules engine supporting Underwriting, Corporate Action and Security Master File3. Capture more comprehensive information on securities during eligibility process
15
Top “10” Highlights
4. Announcement Makeover
•Introduction of new naming convention
•Single Announcement processor for all events
•Process complex events within a single envelope
•Link related corporate action events
16
Top “10” Highlights
5. Improved Entitlement Calculations
•Common payment options across all event types
•Process pro-rata lotteries6. Common Instruction Processor
•Event specific instruction cutoff times
•Customizable instruction “approval” mechanism
17
Top “10” Highlights
7. Improved payment reporting
•Taxes and fees will no longer be net from the declared rates
•Post Payable adjustments will be reversed and reallocated
8. ISO15022 messaging support for entire event life-cycle
18
Top “10” Highlights
9. Web browser access with enhanced reporting and export functionality10. A Participant “dashboard” that “pushes” critical information to forefront
19
Current Status
•Business Requirements Documents finalized
•Currently in Analysis and Design
•Reviewing and Responding to Customer Feedback
•Launched Reengineering Website
•Business Requirements Documents finalized
•Currently in Analysis and Design
•Reviewing and Responding to Customer Feedback
•Launched Reengineering Website
20
Next Steps
•Customer Input
•Underwriting Focus Groups completed
•Corporate Action Focus Groups Round 2 to be held 4th Quarter 2006
•Finalize Analysis and Design Phase
•Ongoing Communication Strategy
•Customer Input
•Underwriting Focus Groups completed
•Corporate Action Focus Groups Round 2 to be held 4th Quarter 2006
•Finalize Analysis and Design Phase
•Ongoing Communication Strategy
21
Timeline – Key Dates
Underwriting
• Initiate UAT Q4 2006
•Commence Transition Q2 2007
Corporate Actions
• Initiate UAT Q3 2007
•Commence Transition Q3 2008
Underwriting
• Initiate UAT Q4 2006
•Commence Transition Q2 2007
Corporate Actions
• Initiate UAT Q3 2007
•Commence Transition Q3 2008
22
Questions
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