It is the implementation in late 2022 of DTCC’s workflow M2i, targeting trades between investment managers and their executing brokers, that is now showing documented success. Q4 2023 numbers show same-day affirmation exceptions having come down by 38 percent.
The urgency to minimise failures in affirmation and settlement has been heightened by the ongoing move to T+1, going live at the end of May this year. The positive figures for Goldman Sachs are presented in a press release by US central securities depository DTCC, in its role as operator of the CTM matching platform, on which the workflow M2i – Match to Instruct – is based.
DTCC claims the service to generally produce an affirmation rate near 100 percent for its users by 9:00 pm Eastern Time on the trade date, “achieving the level of straight through processing necessary to meet their counterparties’ T+1 [same-day affirmation] requirements and cut-off times”. “Clients utilizing CTM’s M2i workflow benefit from central matching and auto-affirmation capabilities that are typically more efficient than local matching and affirmation by custodians,” DTCC explains.
In its trades with investment manager counterparties who also use the Match to Instruct flow, the US settlement fails for Goldman Sachs were reduced by 64 percent, measured by value.
“In addition, the M2i platform’s enhanced SSI enrichment capabilities resulted in more settlements occurring without additional input from our Operations teams,” says Risa Lederhandler, Global Head of Equities and Securities Services Operations at Goldman Sachs, in the press release. “As the industry continues to prepare for T+1, we are focused on further increasing our automation of allocations in the US market.”