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THE STORY OF THE DEPOSITORY TRUST & CLEARING CORPORATION
plus three days, T+3, to two days, or T+2. The move was seen as ambitious and would be the most significant change to the settlement cycle since the transition from T+5 20 years earlier. The markets had grown considerably since then and the shift to T+2 would impact 90 million daily transactions valued at more than $960 billion. After several years of industry engagement and preparation, including partnering with SIFMA and ICE, all the pieces were in place. Over Labor Day weekend in 2017, DTCC and the industry made the move. “There was no playbook to follow, so we had to write one from scratch,” said John Abel, executive director, Settlement and Asset Servicing Strategy, the firm’s point person on the initiative. “We meticulously detailed every process in the US equity, corporate and municipal bond and unit investment trust trade life cycle, and determined how each event would be impacted by the move to T+2. We then documented this information and shared the results with the industry to guide them through the change.” T+2 brought the US settlement cycle into alignment with most European Union member states and countries in Asia. The Canadian markets and a number of South American markets also transitioned that same weekend.
Cybersecurity
In an increasingly technology-driven interconnected world, cyber risks are ever-present. DTCC works diligently to ensure its systems are tightly monitored, yet the possibility of a cyberattack requires constant vigilance. “It could be devastating if an attack is successful. It’s an environment where we are seeing increasing sophistication,” said Andrew Gray, former DTCC managing director, group chief risk officer. “It’s akin to an arms race, where you have to make sure you have all the protection, as the people who are trying to attack you get more sophisticated and widespread. As DTCC gains visibility, we become a bigger target.” It was not just DTCC’s visibility that increased risk. The firm’s risk profile continued to evolve in response to changes in market structure, technology, regulation and other dynamics. And new forms of risk emerged that did not previously exist or had historically registered low on the threat spectrum. While cyberattacks have been around for decades, their intensity has grown significantly in just the last few years. According to DTCC’s annual Systemic Risk Barometer, cyberattacks consistently rank among the most serious threats to the financial system. In response, DTCC launched a program to develop and enhance systems and processes to protect the infrastructure. It is an ever-moving target.
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