Below are two recent press releases announcing significant progress in the implementation of the MMI Communications Standards. Earlier this year, we dubbed 2008 the "Year of Adoption". The announcements by two of the leading firms in our industry demonstrate a commitment to the standards. With these two major sponsors transmitting data using the standards in a production environment, the road is paved for the rest of the industry to achieve similar gains in scalability, efficiency and reach. The many investment managers on Citi's GTS platform, the UBS platform or Citi's Smith Barney platform now have cost saving incentives to also implement the standards.
At our recent MMI Solutions Conference, we hosted a special session that highlighted several member firms and vendors who have committed to implementing the standards. We also provided an audio link to the session for remote participants. The attendance far exceeded our expectations and confirmed the wide interest in working with the standards.
October 16, 2008 10:20 AM Eastern Daylight Time
Citi Goes Live with DTCC's Managed Accounts Service
NEW YORK--(BUSINESS WIRE)--The Depository Trust & Clearing Corporation (DTCC) today announced that two of Citi's businesses, Smith Barney and Global Transaction Services, have gone into full production with the DTCC Managed Accounts Service, after a test period and successful migration of their systems to the new platform.
DTCC's automated, centralized platform for managed accounts is streamlining communications among investment managers, sponsors and service providers. These communications comprise messages associated with opening and maintaining managed accounts throughout their lifecycle.
The Money Management Institute (MMI) and Dover Research LLC state that assets under management for separately managed accounts, unified managed accounts, dual-contracts and multi-disciplined portfolios have grown to $1.4 trillion.
Smith Barney, the largest sponsor of managed accounts in the U.S., has nearly 30 percent of the managed account market, according to Cerulli Associates. Investment Administration Services, a unit of Citi's Global Transaction Services, is a leading provider in the U.S. managed account outsourcing market and provides operations services to investment managers with over 75,000 managed accounts. Both Citi businesses are charter participants in the Managed Accounts Service, which is being provided by DTCC Solutions LLC, a subsidiary of DTCC.
DTCC's infrastructure supports virtually all of the securities markets in the U.S., from equities and fixed-income, to mutual funds, insurance investments and over-the-counter derivatives. "By providing the managed accounts marketplace access to our infrastructure, we can extend the same security, reliability and economies of scale that our other customers enjoy," explained Ann Bergin, managing director and general manager, DTCC Wealth Management Services.
Chandresh Iyer, managing director and head of Citi's Investment Administration Services, explained: "Connecting the Global Transaction Services portal to DTCC's gateway will bring a new level of operational scalability to our business and to our clients. As a premium provider in the managed accounts space, we look for ways to unleash the full potential of these accounts and, at the same time, allow our multiple investment manager and sponsor clients to focus on customization and premier client services."
Smith Barney's Managing Director Dana Fowler added: "We are very pleased to be at the forefront of launching a service that is the first to address operational issues that have traditionally been roadblocks. We look forward to working with our external investment advisor partners to incorporate it into their internal systems."
DTCC will continue to expand the functionality of the service over the next two years to support dual contracts, unified managed accounts and model-only products, all of which are becoming increasingly important in the managed account space.
Also, in a move to make it easier for mutual funds to become part of managed account programs, on October 20 DTCC is introducing a new membership category for investment managers or their agents to become non-settling members of DTCC's National Securities Clearing Corporation (NSCC) subsidiary. This will allow them to access NSCC's automated Mutual Fund Services, including Fund/SERV® and Networking. Fund/SERV is the standard used by fund companies and their distributor partners for purchase, redemption and exchange transactions, as well as money settlement. Networking centralizes the flow of account-level information between funds and distributors so that all parties can maintain identical records.
About DTCC
The Depository Trust & Clearing Corporation (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 financial firms and third parties who market these products. DTCC's depository provides custody and asset servicing for 3.5 million securities issues from the United States and 110 other countries and territories, valued at $40 trillion. Last year, DTCC settled more than $1.86 quadrillion in securities transactions. DTCC has operating facilities in multiple locations in the United States and overseas. For more information on DTCC, visit www.dtcc.com.
About Citi
Citi, the leading global financial services company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Citi's major brand names include Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and Nikko. Additional information may be found at www.citigroup.com or www.citi.com.
Contacts
DTCC
Karen Gregory, 212-855-5472
kgregory@dtcc.com
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October 17, 2008 10:21 AM Eastern Daylight Time
UBS Joins DTCC Managed Accounts Service
NEW YORK--(BUSINESS WIRE)--UBS Financial Services Inc., one of the largest providers of managed accounts in the U.S., has joined the DTCC Managed Accounts Service (MAS), a centralized platform designed to automate and standardize communications among sponsors, investment managers and service providers.
"We are extremely pleased to partner with DTCC on this initiative. The managed accounts industry is a prime candidate for standardization which will result in efficiencies that can be passed on to clients," said Stephen Roussin, managing director and head of Investment Solutions, UBS Wealth Management U.S.
According to The Money Management Institute, current assets under management for managed accounts are $1.4 trillion, reflected in large part by high-net-worth households and 78 million baby boomers looking to preserve capital accumulation and minimize the impact of taxes.
Ann Bergin, managing director and general manager, DTCC Wealth Management Services, noted: "UBS is one of the foremost sponsors in this industry, and to have them join our charter members, Citi's Smith Barney and Global Transaction Services businesses, is particularly gratifying to us. Their commitment to the service is further evidence of the importance of industry protocols to remove obstacles to growth and allow market participants to concentrate on product innovation and customer service."
DTCC's MAS provides an efficient and secure process for sharing data required to open and support managed accounts. Most messages today are transmitted through disparate technology platforms or manually. Depending on the size and complexity of an investor's account, a sponsor could have separate connections to multiple investment managers, increasing the potential for errors, delays and high operational costs.
DTCC's service will mitigate these risks and streamline communications among all parties involved with different types of managed accounts. These accounts include single- and dual-contract separately managed accounts where sponsors use the expertise of one or multiple investment managers; and unified managed accounts, which are individual accounts containing numerous investment products - mutual funds, stocks, bonds and exchange-traded funds, for example, in addition to separately managed accounts.
MAS operates on DTCC's secure telecom network, which today provides connectivity to virtually all trading parties in the U.S.
About UBS
UBS is a leading global wealth manager, a leading global investment banking and securities firm and one of the largest global asset managers. In Switzerland, UBS is the market leader in retail and commercial banking.
About DTCC
The Managed Account Service is an offering DTCC Solutions LLC, a subsidiary of The Depository Trust & Clearing Corporation (DTCC). The organization is the world's largest securities clearance and settlement organization. Through its subsidiaries, it 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 financial firms and third parties who market these products. DTCC's depository provides custody and asset servicing for 3.5 million securities issues from the United States and 110 other countries and territories, valued at $40 trillion. In 2007, DTCC settled more than $1.86 quadrillion in securities transactions. DTCC has operating facilities in multiple locations in the United States and overseas. For more information on DTCC, visit www.dtcc.com.