The Depository Trust & Clearing Corp. has decided to open its proprietary message structures to the separately managed accounts industry. The decision comes as the board of the Money Management Institute said “yes” to the recommendations by consulting firm Accenture to pursue open standards to improve operations in the SMA industry as opposed to having DTCC solely run a communications hub (www.fundaction.com, 3/24).
Messages are operating instructions ­ such as to open an account ­ that go back and forth between money managers and sponsors. MMI hired Merrill Lynch veteran Gary Jones to run its operations efforts.
Accenture recommended to the Money Management Institute that the group adopt open standards and become a standard-setting organization as part of its long push to get better operational efficiency in the separate accounts industry.
Ann Bergin, managing director, distribution services at DTCC, said the Accenture report shoots adrenaline into the process of improving operations in the SMA industry. She explained that DTCC plans to move ahead in offering communications infrastructure as it had before, despite not being the sole provider under the Accenture proposal.
“The economics change, but we are happy to participate.” Bergin said that without DTCC subsidiary National Securities Clearing Corp. as the central hub, sponsors and managers will each have to participate in several systems. Bergin said NSCC will make the schemas available to the industry. Schemas are the structure of a message that is understood by a user’s computer, and allow individual firms to communicate in a standard way. DTCC is still working on pricing for the service.