The Depository Trust & Clearing Corporation, which services more than two million securities issues around the world, has opened an office in Shanghai. The new office will provide 24-hour coverage for its wholly owned corporate actions subsidiary, Global Asset Solutions.
The Shanghai office will support a corporate action validation service, which provides brokers, banks and other financial institutions with an automated, standardized source of global corporate action announcement information for 100+ events, ranging from rights offerings to elective dividends to tender offers and stock splits.
"With the launch of the Shanghai office, our GCA validation business will be a truly global operation, offering a service that follows the sun," said Jill M. Considine, chairman and chief executive officer of DTCC. “From Monday morning in Asia to Friday evening in the United States, whenever and wherever markets are open, we will have continuous corporate action information for our clients.”
James Femia, DTCC managing director and head of the GCA business, says: "We expect to have about 30 corporate actions specialists in Shanghai tracking securities from across the Asian markets. This will complement our London and US-based service centres."
"Without question, Asian corporate actions are the most complicated because of the differing market standards and practices, as well as language differences," said Femia. "DTCC recognizes the importance of being in the local time zone, speaking the local language and having the local contacts."
DTCC selected Shanghai after a survey of nine potential sites. Search criteria included availability of a large skilled and educated labour pool, varied language availability, cost-effectiveness and quality-of-life considerations. The office will be managed by Andrew Barnes and will focus on corporate actions from Australia, China, Japan, Korea, Hong Kong, New Zealand, Singapore, Taiwan and Thailand and some other Asian countries.
The GCA validation service was launched last year by DTCC to offer clients timely market-sensitive information. It also offers custodian verification capabilities in which custodians' announcement notifications are confidentially compared with announcements generated by the DTCC to enhance the overall quality of information. The service allows customers to offload functions that are largely manual and non-standardized, and thus error-prone, risky and costly.