Sumitomo Mitsui Trust Adopts DTCC for Faster Trade Processing

The Depository Trust & Clearing Corporation (DTCC) announced a significant development in the financial industry as Sumitomo Mitsui Trust Asset Management embraces DTCC’s Institutional Trade Processing (ITP) suite of services. This move comes as the industry gears up for the United States’ transition to a T+1 settlement cycle on May 28, 2024.

Sumitomo Mitsui Trust Asset Management has integrated DTCC ITP’s Continuous Linked Settlement (CLS) Trade Matching (CTM) platform, incorporating CTM’s Match to Instruct (M2i) workflow. Additionally, they are leveraging TradeSuite ID, ALERT, and Settlement Instruction Manager to fully automate their post-trade processing. This automation aims to facilitate same-day affirmation (SDA) for cross-border transactions within the Asia-Pacific (APAC) region.

Moreover, Sumitomo Mitsui Trust Asset Management became the first Japanese asset management firm to adopt ITP services through Nomura Research Institute’s (NRI) SmartBridge Advance. This collaborative effort between DTCC and NRI underscores the commitment to streamlining trade processes and aligning with global standards.

Sumitomo Mitsui Trust Adopts DTCC for Faster Trade Processing

Yosuke Hosokawa, representing Sumitomo Mitsui Trust Asset Management, expressed their satisfaction with adopting DTCC’s ITP suite, emphasizing the importance of global cooperation in enabling accelerated settlement for clients amid the transition to T+1 settlement in the U.S.

The key to achieving accelerated settlement lies in automating post-trade agreement and affirmation processes. CTM plays a pivotal role in this by centralizing the matching of cross-border and U.S. equity and fixed-income transactions, thereby automating trade confirmation processes.

CTM’s M2i workflow, coupled with SSI enrichment via ALERT, streamlines affirmation options, enabling automatic trade affirmation and delivery of instructions for Depository Trust Company (DTC)-eligible securities directly to the U.S. depository for settlement.

By integrating Settlement Instruction Manager, which automates settlement instruction generation and transmission to custodians and third parties, users can effectively manage and monitor trade lifecycles through settlement finality.

In compliance with Japanese regulatory mandates, appointed trust banks oversee underlying investment managers’ trading activities and are integrated into the pre-settlement, post-trade communications chain. Settlement Instruction Manager facilitates a seamless “soto-soto” arrangement, where investment managers send settlement instructions simultaneously to custodians and trust banks, enabling the achievement of SDA and T+1 settlement within the APAC region.

Val Wotton, managing director and general manager of DTCC institutional trade processing, expressed satisfaction with partnering with Sumitomo Mitsui Trust Asset Management to enhance settlement capabilities in the region. With the impending move to T+1 settlement in the U.S., achieving faster settlement times for both cross-border and domestic transactions remains a top priority.

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