Improving affirmation timeliness and reducing settlement fails are key, as the industry sets its sights on a U.S. move to T+1 in May 2024
New York/London/Hong Kong/Singapore/Sydney, February 14, 2024 ‒ DTCC, the premier post-trade market infrastructure for the global financial services industry, today announced that Goldman Sachs & Co. LLC has achieved a greater than 99% same day affirmation rate and a significant improvement in settlement rates for transactions leveraging CTM’s Match to Instruct (M2i) workflow in Q4 2023. In addition, Goldman Sachs was able to achieve a 38% reduction in same-day affirmation exceptions and a 64% reduction in US settlement fails by value, when matching and affirming trades with investment manager counterparties who also use CTM’s M2i.
CTM’s M2i workflow significantly increases same day affirmation (SDA) rates on DTC-eligible securities when a trade match occurs between an investment manager and executing broker. Clients utilizing CTM’s M2i workflow benefit from central matching and auto-affirmation capabilities that are typically more efficient than local matching and affirmation by custodians. Today, most CTM investment managers leveraging M2i to match and affirm their U.S. trades achieve a near 100% affirmation rate by 9:00pm ET on trade date, achieving the level of straight through processing necessary to meet their counterparties’ T+1 SDA requirements and cut-off times.
As the financial services industry prepares for the upcoming U.S. move to T+1 settlement on May 28, 2024, firms are looking closely at their post-trade processes to increase automation and to remove inefficiency. Goldman Sachs & Co. LLC, a self-clearing broker dealer, implemented CTM’s M2i workflow in Q4 2022 as part of their broader strategy to improve settlement efficiency and create a streamlined post trade experience for clients. They performed an impact analysis across the investment managers leveraging the M2i workflow and observed an increase in same-day affirmations.
“Automation is a key enabler of operational efficiency and enhanced client experience. We were pleased to validate through our analysis that our settlement efficiency strategy, supported by CTM’s M2i workflow, has resulted in a significant reduction in settlement fails for our clients. We found that M2i’s process increased affirmation rates by 9pm ET on T, a key objective as we prepare for the move to T+1. In addition, the M2i platform’s enhanced SSI enrichment capabilities resulted in more settlements occurring without additional input from our Operations teams,” said Risa Lederhandler, Global Head of Equities and Securities Services Operations at Goldman Sachs. “As the industry continues to prepare for T+1, we are focused on further increasing our automation of allocations in the US market. M2i is core to this objective.”
“It is exciting to see Goldman Sachs’ results from leveraging CTM’s M2i workflow, a critical enabler of T+1 that helps to significantly reduce trade fails and facilitates straight-through processing,” said Val Wotton, Managing Director and General Manager of DTCC Institutional Trade Processing. “Clients utilizing M2i benefit from a significant increase in SDA rates for DTC-eligible trades, ultimately reducing costs related to trade fails, exception resolution costs, and operational friction. We are pleased to provide these benefits to the financial services industry.”
CTM, part of DTCC’s ITP suite of products, is a central matching service for cross-border and domestic transactions across multiple asset classes that has become a global best practice. The adoption of CTM’s M2i workflow, which requires subscriptions to CTM, TradeSuite ID, and SSI enrichment via ALERT, helps clients improve T+1 affirmation. By automating and streamlining the allocation, confirmation and affirmation processes, clients can significantly reduce trade lifecycle and achieve accelerated settlement.
Goldman Sachs & Co. LLC. is one of DTCC’s industry owners.
About DTCC
With 50 years of experience, DTCC is the premier post-trade market infrastructure for the global financial services industry. From 20 locations around the world, DTCC, through its subsidiaries, automates, centralizes, and standardizes the processing of financial transactions, mitigating risk, increasing transparency, enhancing performance and driving efficiency for thousands of broker/dealers, custodian banks and asset managers. Industry owned and governed, the firm innovates purposefully, simplifying the complexities of clearing, settlement, asset servicing, transaction processing, trade reporting and data services across asset classes and bringing increased security, enhanced resilience and soundness to financial markets. In 2022, DTCC’s subsidiaries processed securities transactions valued at U.S. $2.5 quadrillion and its depository subsidiary provided custody and asset servicing for securities issues from over 150 countries and territories valued at U.S. $72 trillion. DTCC’s Global Trade Repository service, through locally registered, licensed, or approved trade repositories, processes more than 17.5 billion messages annually. To learn more, please visit us at www.dtcc.com or connect with us on LinkedIn, X, YouTube, Facebook, and Instagram.