DTCC Achieves Automation of Voluntary Corporate Actions Lifecycle to Help Industry Navigate Rising Risks, Costs

The Depository Trust & Clearing Corporation (DTCC), the post-trade market infrastructure for the global financial services industry, revealed that its subsidiary, The Depository Trust Company (DTC), successfully “processed the U.S. market’s first-ever, fully-automated voluntary reorganization ISO 20022 instruction as part of its newly automated Voluntary Reorganization service.”

With the launch of this new automation, DTCC moves “towards completion of its journey to fully automate the corporate actions lifecycle from end-to-end, helping clients reduce the rising costs and risks associated with the corporate action process.”

In recent years, the corporate events process has “become increasingly complicated due to the rise in popularity of financial instruments including securitized derivatives and structured equities – both of which are typically backed by other securities or triggered by market conditions.”

In response to this growth and complexity, firms across the industry have “turned to large teams of personnel to specifically oversee and monitor the voluntary instruction process, in part to reduce the risk of costly errors.”

Following a robust testing period with Broadridge, a global fintech leader that currently services more than 60 of DTCC’s corporate actions mutual clients, DTCC launched “the newly-automated Voluntary Reorganization service.”

The service provides clients with the enhanced ability “to manage and execute corporate action instructions around time-sensitive events in a more streamlined and efficient manner.”

DTCC processes more than 600,000 reorganization instructions every year.

Ann Marie Bria, Executive Director, Asset Services Business Management at DTCC, said:

“This is a major milestone made possible by the partnership and support of Broadridge, our clients, and key stakeholders across the industry. Having end-to-end automation throughout the corporate actions lifecycle will allow the industry to utilize fixed data formats and a standardized set of rules, creating new efficiencies while reducing risks and costs.”

Michael Wood, Head of Asset Servicing, Broadridge, remarked:

“We are excited to have partnered with DTCC on the launch of their newly automated Voluntary Reorganization service, giving Broadridge the ability to automate the full end-to-end corporate actions lifecycle for users of its global, cloud-hosted, next generation corporate actions solution by incorporating fully automated and integrated election instructions to DTC in ISO 20022 format. This enhanced service will increase STP rates on voluntary corporate actions, reduce risk associated with manual errors and provide significant scalability and cost savings for the industry.”

With more than 45 years of experience, DTCC is “the premier post-trade market infrastructure for the global financial services industry.”

From 21 locations around the world, DTCC, through its subsidiaries, “automates, centralizes and standardizes the processing of financial transactions, mitigating risk, increasing transparency and driving efficiency for thousands of broker/dealers, custodian banks and asset managers.”

Industry owned and governed, the firm “simplifies the complexities of clearing, settlement, asset servicing, data management, data reporting and information services across asset classes, bringing increased security and soundness to financial markets.”

In 2021, DTCC’s subsidiaries “processed securities transactions valued at nearly U.S. $2.4 quadrillion.”

Its depository “provides custody and asset servicing for securities issues from 177 countries and territories valued at U.S. $87.1 trillion.”

DTCC’s Global Trade Repository service, through locally registered, licensed, or approved trade repositories, “processes 16 billion messages annually.”

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