DTC Tests Corporate Actions Instructions on 20022
In a bid to advance corporate actions processing, a subsidiary of industry utility DTCC has begun testing inbound instructions that conform to the ISO 20022 standard for financial messaging, officials say.The first automated instruction message was received from Interactive Brokers through DTCC’s Depository Trust Company (DTC) subsidiary, which has adopted the 20022 format for corporate actions processing.
The DTCC is working with clients to test electronic instructions for distribution event types, says Rob Epstein, DTCC vice president, Asset Services in a statement. Next year, the DTCC will be introducing instruction statement reporting via 20022-based “CAST” reporting messages that will allow firms to automate the tracking process for outstanding election balances, according to the DTCC.
This latest round of testing is part of the DTCC’s initiative to automate the instruction process by using ISO 20022 messaging to bring greater efficiency to corporate actions by eliminating manual touch points. Standardized messaging with a new browser-based user interface is a key element of the DTCC’s overall Corporate Actions Transformation Initiative. The initiative will be implemented in phases over the next three years.
In other news, the DTCC published a plan for proposed enhancements to its settlement processing for money market instruments (MMIs) to improve intraday settlement finality and further reduce credit and liquidity risk in the MMI market, officials say.
The DTCC through the DTC will adjust its settlement model to eliminate risks associated with intraday reversals of transactions in the DTC’s MMI system caused by issuer failure, officials say. The proposal is subject to regulatory approval. More details are available via a service description paper, “Increasing Certainty and Promoting Intraday Settlement Finality.”
Calypso Technology Links to Tradeweb SEF
Calypso Technology is offering a link to the TW SEF for interest rate swaps and credit default swap indices; the swap execution facility is governed by Tradeweb Markets, officials say.
SEF connectivity is part of an extension of Calypso’s over-the-counter (OTC) clearing solution for end-users, officials say. Calypso added this function to the OTC End-User Clearing service so that it can offer a request-for-quote (RFQ) and order book integration solution.
The new interface offers:
- Connectivity between Calypso and Tradeweb via FIX messages;
- Trade execution via Tradeweb;
- Trade novation through Calypso triggered by cleared messages from Tradeweb;
- And support for Tradeweb’s RFQ system and fully disclosed order book
The link will offer capabilities for block trading above and below the mandatory notional clearing threshold, officials say.
Private Equity Group Readies Data Standard
Global private equity industry group the AltExchange Alliance is poised to start testing its Group One proposed standard for the exchange of data related to capital accounts, schedules of investments, and cash flow activity. This follows the publishing of the Group One template.
The testing phase of the Group One standard, which covers information central to the exchange of core quarterly data, will be completed in early 2014, with full production scheduled for the second quarter, say alliance officials. In the New Year, working groups will begin to focus on Group Two and Three of the private equity data standard.
These steps follow extensive consultation with members including general partnerships (GPs), limited partnerships (LPs), third-party administrators (TPAs) and technology providers. Members helped clarify industry terminology and helped decide how information should be presented. AltExchange officials add that the guidelines previously outlined by Institutional Limited Partners Association (ILPA) and the International Private Equity and Venture Capital Valuation association (IPEV) provided the basis for the working group’s efforts.
The AltExchange Alliance has more than 45 member firms from North America, Europe, and Asia. Membership is open to all firms that operate within the private equity space.
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