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to be reviewed and updated ”. One speaker noted : “ There ’ s a lot of incorrect and bad data out there that then has a knockdown effect on confirms that are either not coming in or are getting rejected .
“ We saw a number of different issues where confirms were going up with a place of settlement as US versus DTC , or Euroclear versus DTC , or incorrect account numbers in different fields that were causing rejection .”
These issues would mean that custodians won ’ t be able to affirm trades .
90 % threshold , which is groundbreaking for custodians . To achieve 100 %, it does require broker-dealers sending confirms , clients sending instructions and the two aligning together .”
One curveball could have been selfaffirmation , whereby custodians may not have sight of affirmed trades . When asked unintended consequences from the new volumes of self-affirmation , one custodian responded : “ We certainly welcome self-affirmation and it helps the entire process . We have the ability to marry client instructions to the affirmed confirm to avoid duplication , as many of the other providers do and that alleviates concerns in that model .
“ I think it comes down to education and where certain tools are being used , if they have other products that are being leveraged , lending , for example , well then maybe you need to have handoff to your lending provider for what ’ s been traded versus waiting for the custodial instruction to hand off . Or FX – if we ’ re doing a custodian FX instruction and that has been self-affirmed and you have the inability to send the instruction timely and you ’ re going to miss an FX deadline , maybe we need to look at using our online portal to book those .”
When considering how to get to 100 % affirmation , one area of feedback we received was that DTCC ’ s ALERT “ needs
NOT OUT OF THE WOODS JUST YET While early signs have been largely positive , and institutions begin to wind down their 24 / 7 support , there is still an expectation of challenges in the future .
“ It may be a little too early to say what the knock down effect on lending will be ,” one executive pointed out . “ A lot of the areas that we thought were going to be particularly problematic , especially from a European and Asia client base , haven ’ t really materialised .
“ However , I think there ’ s still pockets of challenges . As mentioned , the Asiabased clients on Friday evening into their Saturday morning could be super problematic with labour laws being what they are in some of the countries that prohibit working on Saturday . It will be interesting to look at Friday week two numbers and what they show .”
A figure from another organisation then explained that to normalise its fail rates , it has seen an initial uptick in borrows – a practice it hopes to move away from in the coming months .
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