DTCC announced today that Sumitomo Mitsui Trust Asset Management is leveraging DTCC’s suite of Institutional Trade Processing (ITP) services to accelerate trade processing as the industry targets the US transition to a T+1 settlement cycle on May 28, 2024.
Sumitomo Mitsui Trust Asset Management has adopted DTCC ITP’s CTM, including CTM’s Match to Instruct (M2i) workflow as well as leveraging TradeSuite ID, ALERT and Settlement Instruction Manager to fully automate their post-trade processing and support the achievement of same-day confirmation. SDA) for cross-border transactions within the APAC region.
Sumitomo Mitsui Trust Asset Management is the first Japanese asset management company to adopt ITP services through Nomura Research Institute’s (NRI) SmartBridge Advance, an offering made possible through collaborative efforts between DTCC and NRI.
“We are pleased to adopt DTCC’s suite of ITP services,” said Yosuke Hosokawa, Sumitomo Mitsui Trust Asset Management. “As the US transitions to T+1 settlement, it is important that non-US financial markets leverage automation to enable direct processing and align with global standards. We are delighted to be working with the wider industry to deliver speedy settlement to our customers.”
To achieve fast settlement, businesses need to complete post-trade agreement and confirmation faster. This can be achieved by automating the allocation, confirmation and confirmation processes. CTM, DTCC’s platform for centrally matching US and US cross-border equity and fixed income trades, automates the trade confirmation process.
CTM’s M2i workflow leverages CTM’s central matching capabilities, as well as SSI enrichment through ALERT. With this workflow, which includes confirmation options depending on broker setup, trades allocated, confirmed and matched by the institutional investor and their CTM brokers will automatically trigger trade confirmation and delivery of Eligible Trust Company instructions (DTC) securities directly to the US depository for settlement.
When combined with the Settlement Instruction Manager, which automatically generates and sends settlement instructions to custodians and interested third parties, users can more efficiently manage and track the lifecycle of a transaction until settlement is finalized.
In Japan, regulatory mandates require authorized trust banks to supervise the trading activities of their underlying investment managers and be included in the pre-settlement, post-trade communication chain. The Settlement Instruction Manager enables the soto-soto arrangement with trust banks, where investment managers send settlement instructions directly to their custodians at the same time as the trust banks. Trust banks receive a copy of the settlement instructions for record keeping purposes.
This helps achieve SDA and T+1 settlement within the APAC region. Sumitomo Mitsui Trust Asset Management is the first regional asset management company to use the soto-soto arrangement between DTCC’s ITP clients.
“We are pleased to partner with Sumitomo Mitsui Trust Asset Management to offer best practice capabilities that enable rapid settlement in the region,” said Val Wotton, CEO and General Manager, DTCC Institutional Trade Processing. “As we look ahead to the US transition to T+1, achieving faster settlement time for both cross-border and domestic transactions is more important than ever. ITP’s suite of services is uniquely positioned to enable counterparties to reach the final stage of settlement faster, while seamlessly connecting them to thousands of counterparties around the world.”