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DTCC Releases New ISO Messages to Help Automate Corporate Actions Processing

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The Depository Trust & Clearing Corporation (DTCC) today announced the release for public comment of the first drafts of its new corporate actions messages to support the processing of the entire lifecycle of a corporate action including entitlements, elections and payments. In 2009, DTCC processed more than US$3 trillion in corporate actions, and the release of these draft messages is a key element in DTCC’s plan to automate and streamline corporate actions processing.

DTCC, working closely with Swift, a global provider of secure financial messaging services and the ISO 20022 (International Organisation for Standards) Registration Authority, has defined how it will implement new extensible corporate actions messages using the new ISO 20022 standard. ISO 20022 provides the financial services industry with a common platform for the development of messages in a standardised syntax and defines a number of key elements used in messaging. Additional data fields can be included by using what are called ‘extensions.’ DTCC has defined what additional information will be included in these extensions and how they will be formatted for corporate actions messaging.

The new set of documentation follows the release earlier this year of the first draft of extensible corporate action announcement messages and completes the planned suite of DTCC corporate action messages in the ISO 20022 format.

“We now have all our corporate actions messages drafted and will continue to work with the industry toward creating a more standardised model,” said Patrick Kirby, DTCC managing director, Asset Services. “These messages will automate and streamline the processing of corporate action messages, bringing major new efficiencies to the industry as a whole.

“All our corporate action ISO messages for announcements will be in place in 2011, and DTCC customers, including our Global Corporate Action Validation users, can begin using them,” he said. “These corporate action announcement messages will provide DTCC’s clients with intra-day enhanced data as early as next year.”

The ISO 20022 messages are part of DTCC’s corporate actions reengineering initiative that will be phased in during the next several years. The initiative will replace the 60 legacy DTCC systems that currently support corporate actions and will create a single new platform that allows users to manage their entire corporate action lifecycle from announcements through instructions to payments.

In addition to the draft messages for the entire lifecycle of a corporate action, DTCC also released for comment today new corporate action event templates, as well as corporate action event scenarios. The event templates list the data elements by event type supported by DTCC for the US market. Corporate action scenarios identify all event mapping scenarios, which are especially useful where there is no simple one-to-one mapping between legacy files and ISO 20022.

The Depository Trust Company (DTC), a DTCC subsidiary, holds in custody an estimated 90 percent of all US securities, valued at US$33.9 trillion, and helps DTCC customers process millions of corporate actions a year, ranging from routine dividend, principal and interest payments to corporate mergers involving billions of dollars.

“We’re urging our corporate action customers to review these new documents carefully in the next several months and provide us with their input,” said Kirby. “We want to ensure that the industry helps shape the final documents and the new standards.”

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