DTCC subsidiary NSCC has launched an automated solution to simplify its create/redeem transactions for exchange-traded funds collateral. The company processes an average of 260 000 such transactions per day.

“DTCC worked closely with our clients to introduce an innovative solution that automates the exchange of ETF collateral, a previously manual process that was done outside of NSCC,” says Michele Hillery, DTCC’s general manager of equity clearing and DTC settlement service, in a press release.

“With the ongoing volatility in the markets, this automated solution provides the industry much-welcome balance sheet relief and a faster and simplified workflow to support ETF orders.”

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The company says it is able to reduce the amount of collateral required on components that are eligible for NSCC’s netting process, thus freeing capital for its members, by integrating the collateral process within the existing NSCC settlement process. “With this enhancement, NSCC will process create/redeem instructions, generate payment orders, and ensure collateral is exchanged between authorized participants and servicing agents – all within a no-touch process,” it states.