Citi units live with DTCC managed account service

Source: DTCC

The Depository Trust & Clearing Corporation (DTCC) today announced that two of Citi's businesses, Smith Barney and Global Transaction Services, have gone into full production with the DTCC Managed Accounts Service, after a test period and successful migration of their systems to the new platform.

DTCC's automated, centralized platform for managed accounts is streamlining communications among investment managers, sponsors and service providers. These communications comprise messages associated with opening and maintaining managed accounts throughout their lifecycle.

The Money Management Institute (MMI) and Dover Research LLC state that assets under management for separately managed accounts, unified managed accounts, dual-contracts and multi-disciplined portfolios have grown to $1.4 trillion.

Smith Barney, the largest sponsor of managed accounts in the U.S., has nearly 30 percent of the managed account market, according to Cerulli Associates. Investment Administration Services, a unit of Citi's Global Transaction Services, is a leading provider in the U.S. managed account outsourcing market and provides operations services to investment managers with over 75,000 managed accounts. Both Citi businesses are charter participants in the Managed Accounts Service, which is being provided by DTCC Solutions LLC, a subsidiary of DTCC.

DTCC's infrastructure supports virtually all of the securities markets in the U.S., from equities and fixed-income, to mutual funds, insurance investments and over-the-counter derivatives. "By providing the managed accounts marketplace access to our infrastructure, we can extend the same security, reliability and economies of scale that our other customers enjoy," explained Ann Bergin, managing director and general manager, DTCC Wealth Management Services.

Chandresh Iyer, managing director and head of Citi's Investment Administration Services, explained: "Connecting the Global Transaction Services portal to DTCC's gateway will bring a new level of operational scalability to our business and to our clients. As a premium provider in the managed accounts space, we look for ways to unleash the full potential of these accounts and, at the same time, allow our multiple investment manager and sponsor clients toclients to focus on customization and premier client services."

Smith Barney's Managing Director Dana Fowler added: "We are very pleased to be at the forefront of launching a service that is the first to address operational issues that have traditionally been roadblocks. We look forward to working with our external investment advisor partners to incorporate it into their internal systems."

DTCC will continue to expand the functionality of the service over the next two years to support dual contracts, unified managed accounts and model-only products, all of which are becoming increasingly important in the managed account space.

Also, in a move to make it easier for mutual funds to become part of managed account programs, on October 20 DTCC is introducing a new membership category for investment managers or their agents to become non-settling members of DTCC's National Securities Clearing Corporation (NSCC) subsidiary. This will allow them to access NSCC's automated Mutual Fund Services, including Fund/SERV® and Networking. Fund/SERV is the standard used by fund companies and their distributor partners for purchase, redemption and exchange transactions, as well as money settlement. Networking centralizes the flow of account-level information between funds and distributors so that all parties can maintain identical records.

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