The Depository Trust Company (DTC) has announced that it has processed the US market’s first fully automated voluntary organisation ISO 20022 instruction within its newly automated Voluntary Reorganization service.
DTC, the CSD arm of the Depository Trust & Clearing Corporation (DTCC), indicates that this is an important landmark in helping firms to manage voluntary organisations in a fully STP environment and to remove manual interventions from the corporate actions process.
This moves DTCC towards its goal of achieving full end-to-end automation of the corporate actions lifecycle and to reducing risk and cost traditionally linked to corporate actions processing. The New York-based market infrastructure specialist notes that corporate events processing is becoming increasingly complex owing to the rise in use of financial instruments, including securitised derivatives and structured equities which are backed by other securities or triggered by market conditions.
This has prompted firms to employ sizable teams to process voluntary instructions. DTCC’s Voluntary Reorganization service is designed to improve clients’ ability to manage and execute corporate actions instructions around time-sensitive events, doing so within an automated environment.
The company reports that it currently processes over 600,000 reorganisation instructions each year.
DTCC released the Voluntary Reorganization solution after rigorous testing with Broadridge, which currently services more than 60 of DTCC’s corporate actions clients.
DTCC executive director, asset services business management, Ann Marie Bria says: “This is a major milestone made possible by the partnership and support of Broadridge, our clients, and key stakeholders across the industry. Having end-to-end automation throughout the corporate actions lifecycle will allow the industry to utilise fixed data formats and a standardised set of rules, creating new efficiencies while reducing risks and costs."
Broadridge head of asset servicing Michael Wood adds: “We are excited to have partnered with DTCC on the launch of their newly automated Voluntary Reorganization service, giving Broadridge the ability to automate the full end-to-end corporate actions lifecycle for users of its global, cloud-hosted, next generation corporate actions solution by incorporating fully automated and integrated election instructions to DTC in ISO 20022 format.
“This enhanced service will increase STP rates on voluntary corporate actions, reduce risk associated with manual errors, and provide significant scalability and cost savings for the industry.”
