The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced that Omgeo ALERT, the industry’s largest and most compliant online global database for the maintenance and communication of account information and standing settlement instructions (SSIs), reached a key milestone with over six million settlement instructions – up 16% since the end of 2014.
The achievement positions Omgeo ALERT to continue delivering on its goal of creating a single global SSI utility (‘SSI Utility’).
“With the creation of the SSI Utility, market participants can consolidate SSI information across all counterparties, matching platforms and asset classes into one database, thereby reducing risks and costs”, said Paula Arthus, Managing Director and Head of Omgeo and Data Services, DTCC. “There is a move towards industry utilitisation in the post-trade space: build once, deploy many through leveraging scale, and implementing standardisation in processes. With efforts to move the U.S. to a T+2 settlement cycle underway and European regulators debating trade failure charges, the time for SSI automation is now.”
In addition to equity, fixed income, money market and derivatives (exchange traded and over-the-counter) support, DTCC’s Omgeo ALERT holds over 906,000 FX/cash settlement instructions, up 21% since the end of 2014, with a compliance rating of 99%. Due to the critical nature around the timeliness of FX trades and with cash-related transactions turnover soaring since 2010, more financial institutions are automating their FX post-trade operations. The number of FX SSIs is expected to continue to grow significantly as global custodians and prime brokers adopt the service following recent DTCC product updates.
In April 2015, new global custodian and prime broker automation capabilities in Omgeo ALERT were announced. The release, included the Global Custodian Direct (GC Direct) feature, which allows global custodians and prime brokers to be able to take on a more collaborative role in SSI maintenance, with DTCC working with both groups to help drive uptake across their client bases. Since then, Brown Brothers Harriman and J.P. Morgan were the first two custodians to go-live on GC Direct while six prime brokers have implemented DTCC’s Omgeo ALERT for prime brokers supplying SSIs to hedge funds.
Omgeo ALERT is also introducing its third-party enrichment application programming interface (API) to enable clients and vendors open access to SSI data on a real-time, per transaction basis, over a secure network. The open API has been designed to ensure DTCC’s Omgeo ALERT can accommodate future industry initiatives and standards. Clients utilising Omgeo ALERT in conjunction with DTCC-Euroclear GlobalCollateral Ltd. can update their accounts with collateral SSIs. This enables clients to use Omgeo ALERT to automatically enrich their trades.
Bill Meenaghan, Executive Director of DTCC’s Omgeo ALERT, said, “Over the course of 2016, Omgeo ALERT will aim to extend coverage of client SSIs in its database, moving towards the SSI Utility’s goal of 100% coverage, which will allow brokers to retire their internal SSI databases. As the year progresses, more SSIs will be managed by the global custodian instead of manually by the investment manager - further ensuring accurate SSIs in DTCC’s Omgeo ALERT. This move will help to address the issue of trade failures, 30% of which are caused by inaccurate settlement instructions.”
Furthermore, clients using DTCC’s strategic platform for the central matching of cross-border and domestic transactions, Omgeo Central Trade Manager (Omgeo CTM), see increased trade date matching rates, which stand at 95%, with accurate SSIs automatically enriching from Omgeo ALERT. Omgeo ALERT also integrates with other DTCC entity data solutions, including the award-winning Avox Data Services, Clarient Entity Hub (where ‘Avox’ serves as the data provider for the Public KYC Service) and the GMEI utility, to make available a comprehensive data management suite throughout the client lifecycle.