In response to events relating to the close-out of Lehman Brothers in 2008, NSCC and DTC have been engaged with the industry in a series of initiatives designed to improve the efficiency and reduce risks associated with transactions processed through the Automated Customer Accounts Transfer service (ACATS) system. Previous initiatives focused on CNS-eligible and mutual fund ACATS obligations.
As a next step in this series of initiatives, a new ACATS settlement process has been developed for enhanced efficiency and risk reduction for ACATS transfers of CNS-eligible securities and assets that are eligible for settlement at DTC, but not in CNS (non-CNS DTC-eligible assets).
The changes address processing and risk-related concerns with respect to ACATS processing of CNS-eligible securities and non-CNS DTC-eligible assets:
- This initiative creates features for NSCC to track non-CNS DTC-eligible ACATS obligations on ACATS settlement date and reverse only those uncompleted transactions of the defaulting member in the event of a default. Previous initiatives focused on reversals of CNS-eligible and mutual fund ACATS obligations.
- The proposed modifications allow NSCC to track CNS ACATS transactions in case of multiple Member defaults on ACATS settlement date.
- Revised processing ensures that non-CNS DTC-eligible items are credited to a no lien location, in the same way that CNS eligible items are.
The project completed migration to production in June 2014.
|1||Participant Testing of the CNS ACATS and DTC Settling Assets Project (11/18/2013)||18 November 2013|
|2||Set-up of CNS Exemptions for New S Sub-Account (04/10/2014)||09 April 2014|
|3||DTC Settlement Changes for the CNS ACATS and DTC Settling Assets Project (05/08/2014)||08 May 2014|
|4||CNS ACATS and DTC Settling Assets - Addendum Notice (05/19/2014)||18 May 2014|
No. The changes associated with the new ACATS settlement process are not optional. If your firm is an ACATS participating broker-dealer, you will have to make these changes. See also: CNS ACATS DTC.