Corporate Actions Transformation

Report
Corporate Actions Transformation
BDUG
September 23, 2013
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Agenda
Agenda:
 Getting to Know ISO 20022
 Timeline
 Getting Started
 XBRL Update
 The new CA Web
 Wrap Up, Q & A
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Getting to Know ISO 20022
ISO 20022 is the cutting edge standard for
corporate actions messaging
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ISO 20022 – Key Highlights
1. Adoption of Market Practice and Standardization
 Brings the U.S. in line with global standards and market practice
 The yearly standards maintenance process requires DTCC to continuously review and analyze the ISO 20022
format to ensure compliance with market practice
 New event-based data model will replace the existing proprietary structure based on function codes
 Unique Event Identifier (CA ID / COAF) allows for downstream processing and marries announcement, to
entitlement, to election, to payment
2. Greater Straight Through Processing (STP) – average of 26% more data elements in fixed fields in
ISO 20022
 Reduces reliance on narrative text, allowing for more efficient processing
 Reduces risk through the reduction of errors due to streamlined, automated processes, resulting in client
cost savings
3. Real time Messaging
 Over 50% of events are delivered earlier, cited in recent case study
4. Automating the DTCC Election process
 Eliminating the manual election / instruction process can lead to cost savings, operational efficiencies, and
risk reduction
5. Instruction Statement Report – CAST ISO 20022 Message
 Automates the tracking process for outstanding election balances
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ISO 20022 Message Types
MX Identifier
(2013 version)
ISO 20022 Message Names
Extension
Short
Name
Equivalent
ISO 15022
Equivalent DTCC
Processes
seev.031.002.04
CA Notification
supl.001.001.04
CANO
MT 564
Announcements
seev.039.002.04
CA Cancellation Advice
supl.006.001.04
CACN
MT 564
Announcement Cancellations
seev.031.002.04
CA Notification with Eligible Balance
supl.007.001.04
CANO-E
MT 564
Record Date Entitlements
seev.035.002.04
CA Movement Preliminary Advice
supl.009.001.04
CAPA
MT 564
Projected Payments
seev.044.002.04
CA Movement Preliminary Advice
Cancellation Advice
n/a
CAPC
MT 567
NEW
seev.036.002.04
CA Movement Confirmation
supl.011.001.04
CACO
MT 566
Allocations / Payments
seev.037.002.04
CA Movement Reversal Advice
n/a
CARE
MT 566
NEW
seev.032.002.04
CA Event Processing Status Advice
supl.010.001.04
CAPS
MT 564
Unallocated Positions
seev.033.002.04
CA Instruction
supl.008.001.04
CAIN
MT 565
Instructions / Elections
seev.040.002.04
CA Instruction Cancellation Request
n/a
CAIC
MT 565
Instruction Withdrawal
seev.034.002.04
CA Instruction Status Advice
n/a
CAIS
MT 567
Instruction Reply
seev.041.002.04
CA Instruction Cancellation Request
Status Advice
n/a
CACS
MT 567
Withdrawal Reply
seev.042.002.04
Corporate Actions Instruction Statement
Report
n/a
CAST
n/a
NEW
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Transforming the Industry
The DTCC Corporate Actions
Transformation initiative is a multi-year
effort that offers extensive client benefits
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Corporate Actions Transformation Project Milestones
Announcements
2010
Project Timeline
Processing
2012/2014
2014/2015
2015/2016
2011/2012
Phase 1
Phase 2
Phase 3
Phase 4
Phase 5
New Data Model
Announcements
Distribution Events
Redemption Events
Reorg Events
(Internal to DTCC)
(Browser & ISO 20022)
(ISO 20022)
(ISO 20022)
(ISO 20022)
o Implemented new data
model
o Conversion not mandated
until end of 2015 when CCF
files are retired
o Updated internal systems
o All event types included
to support ISO 20022
o Distributions
messages
o Redemptions
o Reorgs
o Only distribution event types o Only redemption event types o Only reorg event types
o Cash/Stock Dividend
o Full/Partial Call
o Tender
o Principal & Interest
o Maturity
o Exchange Offer
o Processing lifecycle
o Entitlements
o Payments
o Instructions
o Adjustment
(Browser)
o Processing lifecycle
o Entitlements
o Payments
o Elections
o Adjustments
(Browser)
o Processing lifecycle
o Entitlements
o Payments
o Elections
o Adjustments
(Browser)
o Mandated conversion to new o Mandated conversion to new o Mandated conversion to new
browser in June 2014
browser in 2015
browser in 2016
o Introduce new redemptions
browser features
o Introduce new reorg browser
features
Ongoing efforts – Clients onboard to ISO 20022 and retire CCF files (DTCC retires announcement files in 2015)
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* Dates subject to change
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Corporate Actions Adoption
Retirement Date
ISO 20022 Replacement
•
End of 2015
•
CANO, CACN
•
2016
•
CANO-E, CAPA, CACO, CAIN, CAST
Redemption Processing
• MMIRC2
• MMI Redemption Files
•
TBD
•
CANO-E, CAPA, CACO
Reorg Processing
• IRT1-5, RPP1-5, RTP1-5
• Rights/Put/Tenders Instructions
•
TBD
•
CANO-E, CAPA, CACO
Current PBS/PTS Function
Retirement Date
Browser Replacement
Announcements
• DIVA, DAWN
•
June 2014
•
Corporate Actions Web
Distributions Processing
• DPAL, SDAR, EDS
•
•
June 2014
Distributions processing moved to
Corporate Actions Web in June 2014
Redemption Processing
• RIPS
•
•
2015
Redemptions processing moved to
Corporate Actions Web in 2015
•
•
2016
Reorg processing moved to Corporate
Actions Web in 2016
Current CCF File
Announcements
•
Legacy
Files
(CCF)
Applications
CMORT, DIVANN, RDPRPT, REOGN2, MUNANN
Distributions Processing
• CSHSET, DIVRDP, REORDP, MMIDC2
• Record Date Position
• Cash/Stock Allocation Files
Reorg Processing
• PTOP
• RTOP
• RIPS
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Getting Started
DTCC provides extensive materials to help
clients transition to ISO 20022 and onto
CA Web
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Getting Started – ISO 20022 Messaging – Testing Roadmap
Step 1 - IT Connectivity
Choose a Communications
Protocol
SMART vs. SWIFT
o If SMART, DTCC does
utilization study
o If needed, client initiates
circuit upgrade
o SMART = MQ, FTP or NDM
o SWIFT = Interact Store &
Forward or FileAct
Step 2 - IT App Programming
Establish Connectivity to
DTCC
Mapping ISO20022 Messages
o Client determines which of its systems are
impacted and identifies CCF files to be
replaced
o Client maps ISO20022 messages to its
applications
o Client gains access to corporate actions
browser to assist in testing effort
o Client completes Router
Exchange Form (REF)
o Client chooses
subscriptions
o DTCC begins sending
ISO20022 messages
Connectivity
Step 3 – CCF vs. ISO – Parallel Testing
Volume/Data Element Check
o Client verifies that its
application is receiving and
processing all events and
associated data elements from
ISO20022 messages
o Client assesses impact of new
data model, messages and
workflow
CCF vs. ISO 20022
Comparison
o Client verifies that
results from
processing CCF files
= results from
processing
ISO20022
messages
Pre-Production System & User Testing
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Application Programming and Testing
Step 4 – Client in Production
Parallel Testing Complete –
Client Deploys ISO 20022
Messaging to Production
Client Discontinues
Receiving CCF Files
o Client has flexibility to
deploy based on event
groups
Production Cutover
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Resources & Contact Information
• Corporate Actions Transformation Learning Center
–
–
Includes business and technical documentation
Learning Center URL
– http://dtcclearning.com/learning/assetservices/
–
Learning Center Registration Information
– http://dtcc.com/downloads/legal/imp_notices/2013/dtc/ope/0188-13.pdf
• Corporate Actions Onboarding Kit
– http://dtcc.com/downloads/leadership/issues/reengineering/Corporate_Actions_Onb
oarding_Kit.pdf
•
Questions regarding adopting ISO 20022 can be sent to the CA Transformation
mailbox at [email protected] ISO 20022 adoption clients can also contact
Roxana Argintescu at [email protected]
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Corporate Actions Transformation Learning Center
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XBRL Update
XBRL Driving STP
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XBRL Initiative
1. Current State
 XBRL concept proven with ADR pilot initiated in February 2013 with issuer Citi ADR
 Deployed inbound XBRL formatted data for dividend event types (cash, stock, special and sale
of rights)
 350+ XBRL messages processed to date
 ADR issuers BNYMellon and JPMChase are actively engaged
 XBRL “instances” automatically converted to ISO 20022 messages for clients
2. Governance
 Charter establishes governance framework
 Taxonomy releases to coincide with annual ISO 20022 standard releases in November of every year
3. ROI
 Risk reduction by eliminating possibility of misinterpretation and keystroke error
 Improved efficiency with greater straight through processing (STP)
 XBRL expected to eliminate hours of manual processing per day once the 3 major ADR banks are in
production
4. Next Steps
 Add additional event types
 Engage SEC and SIFMA to seek regulatory mandate
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Introducing CA Web to know ISO 20022
Manage and process all CA events in one
application (CA Web)
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CA Web – Key Highlights
1. Manage all corporate action event types
 Distributions (e.g. Dividends and P&I), Redemptions, and Reorganizations all on one platform
 Manage the entire lifecycle of corporate actions events, from announcements, through instructions, to
allocations, where data is updated in real-time
2. Key announcement data published
 Manage and process electable corporate action events; user interface displays critical electable events
 Enhanced management controls
3. Full event details available
 Entitlements, instructions, allocations (including projections and adjustments) all available on a single event
record
4. Ability to customize searches
 Save and perform “favorite” searches with a click of a button without re‐selecting each search criteria
 Multiple ways to search for event information, using quick search or advanced search criteria
5. Flexibility to manage data and ease of use
 Ability to see announcement changes, instructions due, allocations and adjustments made, all rolling up to a
dashboard view
 Information is able to be exported to Excel spreadsheets
 Ability to view related DTC accounts, based on predetermined entitlements
 Acronyms and function codes are eliminated; events appear as they are announced in the market and aligned
with the ISO 20022 messages
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