Global Custodian Direct

In the GCD workflow, the global custodian (GC) becomes the owner and maintainer of the SI data while the investment manager is the owner and maintainer of their own accounts and account-specific data. The investment manager places the responsibility of SSI maintenance and distribution with the GC. This model brings greater automation and efficiency to the process and reduces operational burden.

When the investment manager makes the GC the SI Controller, they must also supply their A/C# at Global Custodian so that when the GC submits the SSIs, this account number will be added. Once the GC-maintained SSIs are available on the account, the investment manager can:

1. Update the A/C# at Global Custodian

2. Add other account specific information which they own, such as Interested Party Data

The investment manager is also responsible for granting access to their brokers and maintaining this access. Notification of SSI data managed by GCD is performed in exactly the same manner as IM-managed data – through Alert notifications for additions, edits or deletions.

More detailed information on this process can be found in the ALERT Investment Manager’s Guide to GC Direct Onboarding and the video Understanding the GCD Conversion Process below.

ALERT GC Direct Onboarding Guide for Investment Managers

February 06, 2024

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Additional information provided below includes the step by step details of the GCD conversion process, including steps that the investment manager can take in preparation for formally beginning the GCD conversion process with your GC.

For investment managers who are interested in converting their SSI maintenance to the GCD workflow, the below diagram outlines a check-list of activities that should be performed in preparation for the conversion process.

Before you begin conversions, ensure you have a letter of direction/authority in place with your custodian. DTCC has partnered with the custodian community to create a harmonized  ALERT GCD Letter of Direction  template for use by the community for GCD migrations. Please note, while most custodians will use this form as is, some may choose to use a modified version or leverage a custom form to accommodate any custodian organization preferences. Prior to onboarding, please check with your custodian, obtain the letter of direction, review, sign and return the form to your custodian. You should only attempt conversion in ALERT upon prior agreement with your custodian. An access code can only be linked to a single Global Custodian.

With regards to the first step in the pre-conversion process, below is further information on the data that needs to be reviewed and standardized.

1. Review and compare your current ALERT SSIs to the Country-Security-Method combinations supported by your GC. For details on this, see the ALERT GCD Custodian Capability table further down this page.
   • GCs maintain SSIs at the highest/common level security type (see the Security Type matrix, below). If a security type SSI shares the same SSI detail across multiple security types, the GC will maintain a single SSI. For example, most GCs store SSIs for Government Fixed Income under the ALERT security type for Treasuries (TRY). In this way, the security type of Treasuries will encompass NSD, MNB, ITS, GNM, FRM and AGS. This methodology is followed across each of the main security type groups - Equity, Corporate Bonds, Government Bonds, Money Market, FX/Cash.
   • If SSIs are duplicate across security type groups and SSI detail is the same, investment managers can delete surplus SSIs leaving the highest/common security type SSI supported by their GC. This will streamline the pre-conversion reconciliation process and expedite migration to GCD managed SSIs.
2. The UNIVERSAL method is not supported by any GC therefore any SSIs using this method will be migrated to the correct Country-Method combination during the GC conversion process. Investment managers should check if downstream internal systems are impacted by moving SSIs away from the UNIVERSAL method.
3. Make a note of any Country-Security-Method combinations used by your GCD which differ to your existing instructions and check if downstream internal systems are impacted by this change. This should include reviewing your existing ALERT SSI enrichment process in CTM and making any required mapping changes to ensure that the correct Country-Security-Method combination is selected in the future.
4. Some GCs may require investment managers to register for a TradeSuite^TM Institution ID to support US SSIs in ALERT. To register for an Institution ID, complete and return this e-form using DocuSign.

You can also find more reference documentation related to SSI Maintenance from the Related Content links. Documents in this section, such as the ALERT SSI Maintenance Reference Guide, provides guidelines on a number of key data points that are helpful to consider when looking to migrate your accounts to the ALERT GCD workflow and to ensure that best practices are followed.

Below is an outline of the steps required to convert your accounts to a GCD model. More detailed information on how to perform each of these steps can be found in the ALERT: Understanding the Global Custodian Direct Conversion Process for Investment Managers video, at the beginning of this section. 

1. Before you begin the conversion process and assign control of an account to your global custodian (GC), there are a number of pre-conversion steps to be completed. (See Pre-GCD Conversion Process for further details.)

2. You can change the SI Controller to the GC Direct (GCD) acronym, either manually or using ALERT Plus functionality. Once this step is complete, a conversion request will be sent to the GCD acronym enabling them to accept the request and provide corresponding SSIs for the account.

3. You can monitor the conversion status of your accounts from the GC Direct widget on the ALERT Home Page, indicating if the account is in one of the following statuses:

• In retrieval - the GC has not yet retrieved the conversion request
• Pending - the GC has retrieved the conversion request but has not yet provided SSIs
• Rejected - the GC has rejected the conversion request

4. If there are any SSIs that your GCD does not support, you should add them as account specific instructions. These can either be added manually or using the ALERT Plus functionality.

5. Since the GCD owns the SSI, you cannot override any of the fields that they populate. However, you can add data to non-settlement fields e.g. Interested Party for DTC SSIs. This data can be added to the GCD-owned SSIs either manually or using the ALERT Plus functionality.

6. The final step in the conversion process is to compare your ALERT data post-conversion to the pre-conversion version. In order to do this you will need to use the Data Search-Utilities functionality to extract a report of your GCD-owned SSIs and compare this to the pre-conversion extract that you saved as part of the Pre-GCD Conversion Process.

Regional Custodians/Trustees own the custody relationship with investment managers. They manage local SSIs while leveraging a global custodian's network to access global markets. As a result, investment managers do not have a direct relationship with the global custodian for these accounts.

In this workflow, the investment manager assigns its account to the regional custodian who in turn assigns the account to the global custodian. The global custodian supplies SSIs for open markets and the regional custodian supplies SSIs for markets not maintained by the global custodian.

When the investment manager assigns their account to the regional custodian, the regional custodian receives an Alert message which they must approve. Following approval the regional custodian then assigns the account to the global custodian, using the SI Controller field to identify the GCD acronym.

Detailed documentation that outline this workflow and the specific requirements for implementation can be found below: 

ALERT GC Direct Onboarding Guide for Trustees

February 06, 2024

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ALERT GC Direct Onboarding Guide for Regional Custodians

February 06, 2024

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