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Asset Management / Wealth Management
SuMi Trust taps DTCC for T+1 settlement
Services enable Japanese asset manager to achieve same-day affirmation
The Asset 19 Apr 2024

Sumitomo Mitsui Trust Asset Management (SuMi Trust), a Japan-based asset manager, is leveraging the Institutional Trade Processing (ITP) suite of services of Depository Trust & Clearing Corporation (DTCC) to accelerate trade processing as the industry sets its sights on the US move to a T+1 settlement cycle on May 28.

SuMi Trust is adopting DTCC’s ITP services to fully automate post-trade processing and achieve same-day affirmation (SDA) for cross-border transactions within the Asia-Pacific region.

“As the US transitions to T+1 settlement, it is important that financial markets outside the US leverage automation to enable straight-through processing and align with global standards. We are happy to collaborate with the wider industry to bring accelerated settlement to our clients,” says SuMi Trust’s Yosuke Hosokawa.

To achieve accelerated settlement, firms need to complete post-trade agreement and affirmation faster, and this can be achieved by automating the allocation, confirmation, and affirmation processes.

CTM, DTCC’s platform for the central matching of cross-border and US equity and fixed income transactions, automates the trade confirmation process. CTM’s M2i workflow leverages the central matching capabilities of CTM, as well as SSI (standing settlement instructions) enrichment via ALERT.

With this workflow, which includes affirmation options depending on the broker’s setup, trades that are allocated, confirmed, and matched by the institutional investor and its brokers in CTM will automatically trigger trade affirmation and delivery of instructions for Depository Trust Company (DTC)-eligible securities directly to the US depository for settlement.

When combined with the Settlement Instruction Manager, which automatically generates and sends settlement instructions to custodians and interested third parties, users can more effectively manage and monitor the lifecycle of a trade through to settlement finality.

In Japan, regulatory mandates require appointed trust banks to oversee their underlying investment managers’ trading activities and be included in the pre-settlement, post-trade communications chain.

Settlement Instruction Manager enables the “soto-soto” arrangement with trust banks where investment managers send settlement instructions directly to their custodians simultaneously with the trust banks. The trust banks are given a copy of the settlement instructions for record-keeping purposes. This helps enable the achievement of SDA and T+1 settlement within the APAC region.

SuMi Trust is the first regional asset management firm to utilize the soto-soto arrangement among DTCC’s ITP clients.

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