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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.

 



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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:

  • 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 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.

 

 

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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.

 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.
    1. GCs maintain SSIs at the highest/common level security type (see the Security Type matrix below). If a security trype 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.
    2. If SSIs are duplicate across security type groups and SSI detail is the same, investment managers can delete surpluse SSIs leaving the highest/common security type SSI supported by their GC. Thsi 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. Some GCs may require investment managers to register for a TradeSuiteTM Institution ID to support US SSIs in ALERT. To register for an Institution ID, complete and return this e-form using DocuSign.

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.

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 The below tables provides the 6 main Security Type Groups available in ALERT along with how the mapping of 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.

 

Security Type Groups  EQU  Corp FI Govt FI MM FX/CSH

Unspecified

Main GCD Supported Security Types EQU COB TRY MMT F/X  
Additional GCD Supported Security Types  GDR CON     CSH MSC

Securities supported in each Security Type Group           

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)        

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