Matthew Stauffer, DTCC

Exception Manager growth brings efficiency and cost savings to post-trade lifecycle, says DTCC

The Depository Trust & Clearing Corporation (DTCC) says its Exception Manager platform has passed an important milestone, managing more than two million records related to 849,556 transactions/trades/exceptions and representing over USD100 billion in market activity.

“The growth and adoption of Exception Manager is very encouraging and an important step in moving the industry forward,” says Matthew Stauffer, Managing Director and Head of Institutional Trade Processing at DTCC. “Exception Manager provides a secure integrated and efficient platform between parties that lowers operational risk associated with today’s manual and cumbersome processes, and it’s a critical element for achieving a ‘no-touch’ processing environment.”
DTCC Exception Manager was launched in 2018 to provide a central industry platform to publish, manage, and communicate exceptions throughout the trade settlement lifecycle process. It was created for all parties involved in the trade lifecycle, including buy-side firms, outsourcers, broker/dealers, custodians, prime brokers, clearing brokers and other settlement agents. The platform supports all securities transactions globally, capturing exception details from participating custodians, broker dealers and CSDs, and standardising exception processing to enable faster issue resolution. It centralises and standardises exception processing to enable faster resolution, delivers a significant reduction in the number of exceptions and supports exceptions in trade validation and settlement processing. Effective collaboration and communication enable the reduction of risk and cost in the user’s settlement process while lowering the potential for failed trades.
Automated exception management processes will become increasingly important when new regulations such as the Central Securities Depositories Regulation (CSDR) - which aims to increase the safety and efficiency of securities settlement and the settlement infrastructures in the EU - takes effect. CSDR’s Settlement Discipline Regime (SDR) will require investment firms to put in place measures to mitigate settlement fails. Under the SDR, market participants will be liable to pay daily penalties or charges against each transaction that fails to settle, along with corresponding mandatory buy-ins for failing transactions after the prescribed number of days. By minimising trade exceptions, firms can significantly reduce trade failure and help to minimise or avoid penalties proposed under CSDR’s SDR.
“As a user of the DTCC Exception Manager platform, we are very excited to see this level of growth,” says Mark Austin, Head of Trade Support at Connor, Clark & Lunn Financial Group Ltd. “We strongly feel that Exception Manager should become the industry utility for settlement management. Regulation places a new and higher level of obligation on the buy-side to manage the settlement process that existing practices and methods cannot support.”

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