DTCC Omgeo Alert enhances its operations to become industry's SSI utility

With 6.6 million settlement instructions as of year-end 2016, an increase of 15% over 2015, DTCC remains committed to driving the industry towards automating and replacing onerous, manual processes.

Last year, the industry’s SSI Utility also achieved another significant milestone with over one million FX and cash-based SSIs now held in ALERT, up 13.5% in 2016, with a compliance rating of more than 99%. DTCC also added support for collateral SSIs in ALERT, enabling investment managers and broker/dealers alike to create and maintain SSIs for collateral movements, and provide real-time enrichment of collateral SSIs in the DTCC-Euroclear Global Collateral Ltd.’s Margin Transit Utility (MTU) – a joint venture – as well as other third parties.

“In a short amount of time, ALERT has become the industry’s only SSI Utility – allowing a community of investment managers, broker/dealers and custodian banks to take advantage of multiple benefits,” said Paula Arthus, Managing Director and Head of Omgeo and Data Services at DTCC. “These include ensuring the complete automated communication of account and settlement instructions, lowering costs and streamlining trade processing, taking advantage of DTCC’s expanded asset class coverage and, more importantly, increasing data quality by establishing levels of firm authorization.”

Looking ahead, DTCC expects to sign-up several more firms for its Omgeo ALERT Global Custodian Direct (GC Direct) feature in 2017 – adding to Brown Brothers Harriman and J.P. Morgan, plus several prime brokers. Working with the community, DTCC also intends to build on the more than 32 buy-side clients already leveraging its flagship ALERT Automating SSIs Together (ASSIsT) program, a relatively new initiative to fully embed ALERT into the account onboarding process by providing a solution for non-ALERT investment manager counterparties.

Almost 7% of the ALERT database is now being managed through the automated GC Direct process. GC Direct links the custodian’s SSI database to ALERT via ISO 20022 XML messaging and the process ensures all data is 100% compliant with the industry rules. Joe Liguori, Managing Director and Securities Operations Strategic Initiatives Lead at J.P. Morgan, confirmed they are seeing strong interest: “Buy-side clients love the idea of the custodian managing the SSI data for them. The custodian knows the data best, so it makes sense that we manage the population of this data to the industry’s SSI Utility on their behalf. Data can then be consumed and used by their counterparties.”

“The utility approach to SSI data management delivers significant efficiency and risk reduction to a broad range of market participants including both the buy- and sell-side,” said Bill Meenaghan, Executive Director of DTCC’s Omgeo ALERT. “As we gear up for the transition to a T+2 settlement cycle in the U.S. and the implementation of MiFID II in Europe we would expect greater numbers of firms to delegate the automated management of SSI data and to continue to add to the more than 25,000 legal entity identifiers (LEIs) already in our database, which will lead to more efficient trade matching and lower fail rates.”