DTCC Executives’ 2024 Predictions & Priorities

Brian Steele, Managing Director, President, Clearing & Securities Services

2024 will be a significant year for DTCC, as we prepare for important changes to US market structure. With the transition to a T+1 settlement cycle in the U.S., Canada and Mexico, along with the SEC’s recent decision to expand the use of central clearing for US Treasuries, the industry will be looking closely at their business models, technology and processes to ensure compliance. We recognize the significant effort these initiatives require, and we are committed to working with our clients to ensure a smooth transition.  At the same time, as the ecosystem continues its digital evolution, FMIs are poised to expand how they serve the industry. At DTCC, we’re working collaboratively with the industry to move beyond traditional transaction processing to become architects of a dynamic financial ecosystem that ushers in a new way of serving clients, crossing the TradFi and DeFI ecosystems. It is an exciting time for the financial markets’ digital evolution, which will bring reduced risk, increased efficiency and new capabilities, and as an FMI, we are proud to help lead this transformation alongside the industry.

+++

Tim Cuddihy, Managing Director, Group Chief Risk Officer

As we approach 2024, we are focused on robust operational resilience and effective risk management as geopolitical tensions, cybersecurity threats, and macroeconomic risks all have the potential to cause significant market turmoil. Our critical objective as a central counterparty is to assess multiple and interconnected risks to protect the stability and integrity of global financial markets.

+++

Lynn Bishop, Managing Director, Chief Information Officer (CIO)

In 2024, we will advance DTCC’s modernization journey using innovative technologies to further strengthen the stability, security and resilience of our applications and infrastructure while delivering increased value to the industry. In addition, we have a dedicated team that solely focuses on research and purposeful innovation, identifying business problems and use cases, brainstorming ideas, testing new technologies, and when appropriate, progressing them into proof-of-concepts to assess their potential value. In the case of artificial intelligence (AI), for example, we have conducted a number of POCs, and in June 2023, we introduced DTCC’s internal AI Advisory Group to guide and prioritize our work in this space.

In the coming year and beyond, our collaboration with internal control functions and regulators will also be important. Whether we are leveraging cloud, distributed ledger technology (DLT), AI or machine learning (ML), we will engage our stakeholders early and often to ensure they have a deep understanding of requirements relating to security, resilience and performance to ultimately support the safe and smooth functioning of financial markets.

+++

Jennifer Peve, Managing Director, Global Head of Strategy & Innovation

In 2024, we will be focused on advancing industry dialogue and action on identifying global standards that support the movement of assets across blockchains and integrations to traditional systems. With the acquisition of Securrency, we will provide global leadership to galvanize the industry and drive consensus on this and other foundational issues to advance the digitalization of financial markets. By working alongside our peers and industry participants, we’ll progress innovation and growth in the DeFi space while maintaining the highest standards of risk management and operational resilience.

+++

Nadine Chakar, Managing Director, Global Head of DTCC Digital Assets

With DTCC’s recent acquisition of Securrency, 2024 will usher in a transformative era for financial markets, as we advance the industry’s digital evolution through the adoption of DLT. The new business, known as DTCC Digital Assets, will play a pivotal role in digital assets management and transaction automation. We’ll bridge the gap between traditional financial systems and DeFi, creating new levels of transparency and new data sources that will aid in compliance and transaction reporting.

Looking ahead, we expect firms to prioritize asset tokenization, process automation and seamless post-trade settlement, as they consider blockchain technology to drive greater distribution and enhanced efficiency for post-trade processes. Cross-chain interoperability and the establishment of industry standards will remain critical enablers for sustaining the emerging digital asset ecosystem. We are excited to lead this remarkable transformation that will reshape the financial landscape.

+++

Val Wotton, Managing Director and General Manager, DTCC Institutional Trade Processing

2024 will see the shift to a T+1 settlement cycle in the U.S., which promises significant advantages for financial markets. Benefits include reduced trade risk, lower clearing fund requirements, improved capital utilization, and enhanced operational efficiency. However, for those firms who are still using manual post-trade processes, it is critical that they leverage automated solutions to achieve timely settlement. Further, to ensure a smooth transition by the implementation date of May 28, 2024, comprehensive industry testing is essential, covering end-to-end processes from trade execution to trade settlement and non-standard settlement scenarios.

As part of their preparations, it is crucial for market participants to understand what is required of them to comply with the regulatory mandate, including post-trade processes which are unique to the U.S., such as trade affirmation, which is a critical and unique step in successful trade processing in the region. Assessing operational efficiency and counterparties’ performance is also vital as over time, costs associated with late settlements or inefficient processes can add up. With the T+1 implementation date approaching, it is imperative to act now, understand the impact, test rigorously, and automate post-trade processes for T+1 readiness.

+++

Michele Hillery, General Manager of NSCC’s Equity Clearing and DTC’s Settlement Service

In less than 6 months from now, in May 2024, a new, accelerated T+1 settlement cycle will be introduced in the U.S., Mexico and Canada. This move will deliver multiple benefits to market participants, including a reduction in counterparty risk, reduced margin requirements, improved processing efficiency and increased liquidity. By now, most firms should have already assessed their technology, operations and processes, and made the necessary changes to meet T+1 requirements. Now, it is important that firms turn their attention to testing. While over 95% of the largest firms are already testing T+1 readiness with DTCC, many of the smaller and medium sized firms have yet to begin. It is critical that firms start testing soon. At the same time, firms must ensure they re-assess their risk management practices related to resiliency. In a T+1 environment, firms will have less time to resolve exceptions or service disruptions. The time to prepare is now.

+++

Keisha Bell, Managing Director, Head of Talent Management and Diversity, Equity and Inclusion (DEI)

As we move into 2024, organizations worldwide are increasingly committed to fostering an environment that truly represents the communities they serve, taking concrete actions to move the needle on DEI.

At DTCC, we will continue to lead the charge in advancing talent, diversifying our workforce, nurturing a sense of belonging, and interrupting unconscious bias throughout the coming year and beyond. We are not just aiming for progress; we are aiming for change that makes a difference. DTCC is dedicated to spearheading the journey towards a more diverse, equitable, and inclusive future both within the workplace and broader society.

+++

Laura Klimpel, Managing Director, General Manager of Fixed Income Clearing and Head of SIFMU Business Development

Reflecting on 2023, FICC has remained focused on delivering risk management capabilities to the industry and further strengthening the U.S. Treasury market. The SEC recently adopted new rules and amendments that would implement the 2022 expanded U.S. Treasury clearing proposal and require a larger portion of the U.S. Treasury cash and repo markets to be centrally cleared. FICC will take the necessary steps required under the new rules to prepare for this significant undertaking, while working closely with our clients to ensure a successful implementation.

As we look to 2024 and beyond, the landscape is set for transformation. FICC will continue to provide solutions that enable efficiency and regulatory compliance while offering flexible access models to meet client needs. We will also continue to work collectively with key stakeholders to ensure preparedness for the operational and risk management evolutions that this change will require.

+++

Chris Childs, Managing Director, Head of Repository & Derivatives Services, DTCC CEO & President, DTCC Deriv/SERV LLC

The derivatives industry has reached a critical juncture as it navigates a series of global regulatory rewrites with the promise of a more harmonized and transparent market. The past year has seen firms gearing up for the upcoming regulatory changes such as the EU and UK EMIR Refit and the CFTC’s Rewrite Phase 2, requiring significant advancements in technology and a re-evaluation of legacy processes.

As 2024 approaches, the industry is poised to implement many revised rules, with a focus on enhanced data quality. Next year will be pivotal in fulfilling the G20’s vision for greater transparency and systemic risk analysis across OTC derivatives markets.  We remain committed to driving efficiencies, and mitigating risks, associated with regulatory compliance while delivering new capabilities to support the derivatives industry’s evolving needs.