With T+1 in mind, Sumitomo Mitsui Trust Asset Management intends to fully automate its post-trade processing via DTCC’s ITP suite.
Sumitomo Mitsui Trust Asset Management has become a client of the Institutional Trade Processing (ITP) suite of services from the DTCC to fully automate its post-trade processing and for same day affirmation (SDA) for cross-border transactions within Asia-Pacific, officials say.
This move is in line with the industry push to accelerate trade processing as North America moves to a T+1 settlement cycle on May 28, 2024, officials add.
The firm “has adopted DTCC ITP’s CTM, including CTM’s Match to Instruct (M2i) workflow as well as leveraging TradeSuite ID, ALERT, and Settlement Instruction Manager,” officials say.
The firm “is the first Japanese asset management firm to adopt ITP services through Nomura Research Institute’s (NRI) SmartBridge Advance, an offering made possible through collaborative efforts between DTCC and NRI,” according to the announcement.
“As the U.S. transitions to T+1 settlement, it is important that financial markets outside the U.S. leverage automation to enable straight through processing and align with global standards,” says Yosuke Hosokawa, associate general manager at Sumitomo Mitsui Trust Asset Management, in a prepared statement.
“CTM, DTCC’s platform for the central matching of cross-border and U.S. equity and fixed income transactions, automates the trade confirmation process. CTM’s M2i workflow leverages the central matching capabilities of CTM, as well as SSI enrichment via ALERT,” according to the DTCC.
“Trades that are allocated, confirmed, and matched by the institutional investor and its brokers in CTM will automatically trigger trade affirmation and delivery of instructions for Depository Trust Company (DTC)-eligible securities directly to the U.S. depository for settlement,” DTCC officials say. The Settlement Instruction Manager generates and sends settlement instructions to custodians and interested third parties.
“In Japan, regulatory mandates require appointed trust banks to oversee their underlying investment managers’ trading activities and be included in the pre-settlement, post-trade communications chain,” according to the DTCC.
The Settlement Instruction Manager processes the “soto-soto” arrangement with trust banks where investment managers send settlement instructions directly to their custodians simultaneously with the trust banks, officials say. The trust banks are given a copy of the settlement instructions for record-keeping purposes. This facilitates SDA and T+1 settlement within the APAC region.
“Sumitomo Mitsui Trust Asset Management is the first regional asset management firm to utilize the soto-soto arrangement among DTCC’s ITP clients,” officials add.
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