Overview
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.
More detailed information on this process can be found in the pdf ALERT Investment Manager’s Guide to GC Direct Onboarding (2.48 MB) and also in the below video.
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.
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. 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: 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 and Receiver Agent BIC for CTM Settlement Notification accounts. 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. 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 Letter of Direction template for use by the community for GCD migrations (access the ALERT GCD Letter of Direction template here). 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. 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. The
pdf
ALERT SSI Maintenance Reference Guide
(210 KB)
provides guidelines on a number of key data points to consider when looking to migrate your accounts to the ALERT GCD workflow to ensure that best practices are followed. The below tables provides the 6 main Security Type Groups available in ALERT along with the mapping for the specific Security Types. ALERT Global Custodian Direct (ALERT GCD) organizations maintain SSIs at the highest level therefore if an investment manager wants to leverage the SSIs of a GCD, they should consolidate their SSIs to the Security Types listed under Main GCD Supported Security Types and Additional GCD Supported Security Types. Unspecified Securities supported in each Security Type Group
Security Type Groups
EQU
Corp FI
Govt FI
MM
FX/CSH
Main GCD Supported Security Types
EQU
COB
TRY
MMT
F/X
Additional GCD Supported Security Types
GDR
CON
CSH
MSC
ADR
ABS (Asset Backed)
AGS (Agencies)
BAS (Bankers Acceptance)
CSH (Cash)
MSC (Misc.)
EQU
BKL (Bank Loan)
FRM (Freddie Mac)
CER (Representative Certificate)
F/X (Foreign Exchange)
OPC (Options Contract)
GDR (Global Depository Receipt)
CMO
GNM (Ginnie Mae)
COD
MRG (Margin)
PRC (Premium Contract)
PRS (Premium Shares)
COB (Corp Bond)
ITS (Indexed Treas Sec)
COM (Commercial Paper)
TBA (To Be Announced)
PRP (Priv Place)
RTS (Rights)
CON (Convertible Bond)
MNB (Muni Bond)
FIN (Finance Transaction)
TIM (Time Deposit)
REP (Repurchase)
CPN (Coupons)
NSD (Non US Sovereign Debt)
MMT (Money Market)
TRS (Trans Ship)
FPA (Face or Principal or Nominal Amount)
TRY (Treasuries)
REP (Repo)
ILB (Inflation Linked Bonds)
MBS (Morgage Backed)
NTE (Notes)
SLA (Student Loan)