New York-based Depository Trust & Clearing Corporation (DTCC) has opened an office in Shanghai, its first in the Asia-Pacific region, in order to support its global corporate actions business.
The organization reviewed eight other regional cities but chose Shanghai for its educated labour pool, varied language ability, cost-effectiveness and quality of life. It is using facilities provided by consultancy Accenture, which also helped design the corporate actions service.
Andrew Barnes, who has been with DTCC in New York since 2001, has moved to Shanghai to manage the office. He reports to James Femia, DTCC managing director and head of its global corporate actions business in New York.
The office will support DTCC's Global Corporate Action (GCA) Validation Service, which automates and standardizes global corporate action announcement information for a variety of financial services companies. DTCC launched GCA Validation Service last year. It supports the business from New York and London as well.
Femia says the firm expects to have about 30 corporate action specialists in Shanghai tracking securities across the region. "Without question, Asian corporate actions are the most complicated because of the differing market standards and practices, as well as language differences," he says.
Corporate actions, from dividend payments to M&A deals, is one of the few areas in financial services that has so far resisted automation and standardization, in part because such activities go under different terms across markets. The DTCC hopes to get banks and fund managers to outsource this manual work to it, and it also provides a confirmation service to custodians. UBS is a client and the DTCC says a number of other firms are in pilot tests.
The DTCC clears and settles equities, corporate and municipal bonds, government and mortgage-backed securities and OTC derivatives, as well as provides custody and asset servicing for securities issued both in the US and worldwide. It also processes mutual fund transactions.