With the new year now underway, many industry insiders have chimed in with their predictions of the topics that will occupy the industry for the months ahead. Likewise, senior executives at the Depository Trust and Clearing Corporation (DTCC) have shared their two cents’ worth – and it can be summed up with four key points: T+1 in the EU, Artificial intelligence (AI), digital assets, and the US treasury clearing mandate.
EU’s transition to T+1
Val Wotton, managing director and general manager of DTCC Institutional Trade Processing predicts, “Global accelerated settlement cycles will continue to be the key theme for market participants in 2025, with attention shifting to implementation in the UK and Europe.”
He emphasises DTCC’s support for automation and harmonisation as the keys to enabling T+1, as recommended by the UK’s Accelerated Settlement Taskforce and the European Securiities and Markets Authority (ESMA) in their recent reports.
“We recommend that market participants approach T+1 implementation in the UK and Europe as an opportunity to evaluate holistically their middle and back-office functions and assess how they can increase operational efficiency through automation and standardisation through central matching solutions that enable same day confirmation.”
Taking on the machines
Investments in AI will be a priority in 2025 for DTCC, with the aim to harness the technology to improve client experience and enhance the organisation’s productivitiy, reveals CIO Lynn Bishop. Upskilling employees with a “foundational knowledge of AI” will become “essential”.
Tim Lind, managing director of DTCC Data Services expects that 2025 will see “accelerated transformation of the data supply chain” enabled by AI and cloud-based data marketplaces. Point-to-point connectivity between institutions will be increasingly replaced by “collaborative alternatives that focus on sharing, rather than sending data”.
Going digital
Nadine Chakar, managing director, global head of DTCC digital assets calls 2024 “a pivotal year for digital assets”. She has observed a “strong momentum towards adoption” among both buy- and sell-side institutional investors. Progress has also been made on the regulatory front.
2025 is the time to “put real applications on the ledger using tokenisation”, to “move beyond pilots and start putting projects into production”. She believes that to capture the promise that digital assets hold, collaboration in building an efficient digital market infrastructure and standards will be key.
On its part, DTCC will be using Digital Launchpad, its industry sandbox, to expliore scalable adoption of digital assets.
Just to be clear
Brian Steele, managing director, president, clearing and securities services at DTCC reveals that the expansion of US treasury clearing will be a “huge priority” for the organisation in 2025. DTCC will be “doubling down” to improve its solutions, such as cross margining arrangements and the creation of a default fund to help its clients “maximise capital while complying with mandates such as Basel III rules”.
For those working in the Fixed Income Clearing Corporation (FICC), supporting done-away clearing in the treasury market will be a focus. Laura Klimpel, managing director and head of DTCC’s Fixed Income and Financing Solutions says, “Both of our indirect access models, the Sponsored Service and the Agent Clearing Service which was recently approved by the SEC, support done-away activity. We are also addressing remaining challenges around accounting implications – with resolution anticipated imminently – and will continue to roll out innovative products and services that create new margin and capital efficiencies for our clients.”
