DTCC’S New P&I Processing Method Reduces Risk, Boosts Efficiencies
The number of on-time and correctly identified payments by issuers and paying agents to
“These numbers prove that the new methodology is working, and they are the result of the hard work and efforts of all our stakeholders,” said
DTC collects and allocates entitlements due on DTC-eligible securities on a daily basis. The P&I payments include dividend, interest, periodic principal, redemption and maturity payments. In 2010, DTC collected and allocated more than five million payments totaling
The new methodology allocates only those entitlements that are received on time and with the identifying CUSIP number. Under the previous long-standing industry practice, DTC collected and allocated virtually all payments on the payable date, regardless of whether the payments were received on time or correctly identified. DTC withheld payment only if it determined that the entitlement would not be funded by the agent or issuer.
“Since BNY Mellon is a global leader in both the corporate trust and custody businesses, the DTC Principal and Interest Refinement initiative has had a significant positive effect on us,” said
DTC first announced plans to change the process in a
From
“We estimate, on an annualized basis for 2011, late or unidentified payments will drop by more than 40 percent to less than
About DTCC
DTCC, through its subsidiaries, provides clearance, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, money market instruments and over-the-counter derivatives. In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with their distribution networks. DTCC’s depository provides custody and asset servicing for more than 3.6 million securities issues from
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