The Depository Trust & Clearing Corporation (DTCC), the specialist market infrastructure for the global financial services industry, has launched its new Underwriting Central (UWC) platform, an automated service for electronic Certificates of Deposit (CD) offered by DTCC’s subsidiary, The Depository Trust Company (DTC).
The new, digital UWC platform provides a paperless process for the delivery of CDs, increasing efficiency through automation, improving data quality, reducing risk, and providing greater transparency into the eligibility life cycle. It also represents an important step in bringing the industry closer to achieving full dematerialisation. With DTC’s new UWC platform, issuers can now streamline the underwriting process, seamlessly creating, signing, and delivering CDs within hours, instead of days or weeks.
The new platform leverages electronic vaulting technology to transmit and store data, as well as an e-signature process to execute digital certificates, providing enhanced automation for CD eligibility and issuance processing, and ultimately providing more seamless delivery of these assets to the accounts of end clients. The launch of the new electronic CD platform comes following a successful pilot with nearly 30 underwriters, including BNY Mellon Capital Markets, LLC, Fidelity Capital Markets and Multi-Bank Securities, Inc, as well as more than 50 issuers from regional branches based across the US, including BLC Community Bank (Little Chute, WI) and Luana Savings Bank (Luana, IA).
“The new electronic CD capability reduces the risk of potential disruptions in the physical transport and in-person delivery receipt of CDs, all challenges that were amplified during the shift to remote working as a result of the Covid-19 pandemic,” says Ann Marie Bria, DTCC Executive Director, Asset Services Business Management. “This new paperless process eliminates shipping costs and manual processes and the risk of closing delays for the issuer.”
The delivery of the UWC platform is part of DTCC’s larger effort to fully dematerialise all physical securities to create a more cost-effective, secure and efficient marketplace, as outlined in a whitepaper delivered to the industry last year.
“Thanks to a significant collaborative effort with our clients, we are now one step closer to achieving full dematerialisation,” adds Ann Bergin, DTCC Managing Director and General Manager, Wealth Management Services and Asset Services. “Having a robust, automated process with fewer operational touchpoints is already introducing major benefits to our clients, including increased transparency, cost savings, improved resiliency, and lower risk.”
In addition to this effort and in support of dematerialisation, DTCC is also working on efforts to address other paper-based asset classes at their issuance, such as Corporate Debt, as well as existing securities that are eligible at DTC. Today, less than 1 per cent of assets serviced through the depository are still in physical form, but they represent USD700 billion dollars in value.
