DTCC: Turning headwinds in to tailwinds
18 April 2018 New York
Image: Shutterstock
The Depository Trust & Clearing Corporation (DTCC) will look to create momentum and capture tailwinds in 2018 and beyond, according to its 2017 annual report.
Michael Bodson, president and CEO of the DTCC, explained: “The headwinds facing the industry today may be strong, but we firmly believe we have the experience, knowledge and skills to turn them into tailwinds.”
“And tailwinds have a way of swelling, increasing in strength and intensity and gaining force over time.”
Further reducing friction and fragmentation in the post-trade environment will be key to this process, he added.
According to DTCC, its ability to serve the industry is continuing to improve its financial performance, including growing its net income margin, which the report stated will ensure it has the resources to make strategic investments to benefit the industry and the ability to weather swings in market activity or tough economic times.
Bodson said: “In 2017, our revenues remained strong at $1.7 billion despite fee reductions of $75 million, and our net income margin rose to 9.7 percent, an improvement of 30 percent over the previous year.”
In the report, Robert Druskin, non-executive chairman of the DTCC, explained the importance of continued financial strength and flexibility.
He said this will enable the DTCC to make the investments needed to strengthen its core processes as well as develop new capabilities.
He said: “The flawless execution of our clearance and settlement responsibilities, which are essential to mitigating risk and providing stability, is our foremost priority.”
Bodson also commented on DTCC’s achievements in 2017 which included leading the move to T+2 settlement in the US and completing the industry-wide business resilience exercise under the US Securities and Exchange Commission's (SEC) regulation Systems Compliance and Integrity (SCI).
Developments in financial technology also featured in the CEO’s missive. In 2017, for example, the DTCC also began re-platforming its trade information warehouse for credit derivatives using distributed ledger technology and the cloud.
Commenting on this, Bodson said: “We expect to begin testing the next generation of the service later this year.”
Michael Bodson, president and CEO of the DTCC, explained: “The headwinds facing the industry today may be strong, but we firmly believe we have the experience, knowledge and skills to turn them into tailwinds.”
“And tailwinds have a way of swelling, increasing in strength and intensity and gaining force over time.”
Further reducing friction and fragmentation in the post-trade environment will be key to this process, he added.
According to DTCC, its ability to serve the industry is continuing to improve its financial performance, including growing its net income margin, which the report stated will ensure it has the resources to make strategic investments to benefit the industry and the ability to weather swings in market activity or tough economic times.
Bodson said: “In 2017, our revenues remained strong at $1.7 billion despite fee reductions of $75 million, and our net income margin rose to 9.7 percent, an improvement of 30 percent over the previous year.”
In the report, Robert Druskin, non-executive chairman of the DTCC, explained the importance of continued financial strength and flexibility.
He said this will enable the DTCC to make the investments needed to strengthen its core processes as well as develop new capabilities.
He said: “The flawless execution of our clearance and settlement responsibilities, which are essential to mitigating risk and providing stability, is our foremost priority.”
Bodson also commented on DTCC’s achievements in 2017 which included leading the move to T+2 settlement in the US and completing the industry-wide business resilience exercise under the US Securities and Exchange Commission's (SEC) regulation Systems Compliance and Integrity (SCI).
Developments in financial technology also featured in the CEO’s missive. In 2017, for example, the DTCC also began re-platforming its trade information warehouse for credit derivatives using distributed ledger technology and the cloud.
Commenting on this, Bodson said: “We expect to begin testing the next generation of the service later this year.”
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