DTCC has addressed the problem of trade failures within the post-trade marketplace in a newly published white paper.
DTCC identified the potentially positive role technology could play in helping to combat issues caused by increased regulatory requirements, costs and cybersecurity.
In particular, ‘The Roadmap to Automation’ highlighted the contribution of standing settlement instructions (SSIs) to the increase in trade failures, owing to the handling of trade data by various discordant systems.
In order to ensure the automation of SSIs, DTCC emphasised the need for “structural transformation” within capital markets.
Furthermore, full automation is predicted to help combat institutional security issues surrounding online communications.
DTCC estimated that approximately 50 percent of institutional participants still send important SSI information manually rather than via a secure platform, which contributes to inefficiency.
It was also highlighted that DTCC’s ALERT platform already has over 3,600 participants using its compliant messaging to begin the automation process for SSIs.
DTCC’s managing director and head of institutional trade processing, Matthew Stauffer, commented: “Settlement process are now attracting more attention as regulators require shorter and more certain settlement with the potential of penalties for noncompliance.”
“Removing manual touch points in the settlement process will have a tremendously positive impact in efficiency and security.”
