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ALERT GC Direct

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Overview

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 their account to the regional custodian who in turn assigns the account to the global custodian. The global custodian supplies SSIs for open markets, whilst the regional custodian supplies SSIs for markets not maintained by the global custodian.

RCWorkflow

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 for Regional Custodians/Trustees

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ALERT for Regional Custodian Guide to GC Direct OnboardingALERT for Regional Custodian Guide to GC Direct Onboarding

This document focuses on GC Direct information, the onboarding steps required to implement GC Direct, and the SSI monitoring process for regional custodians.

May 01, 2018
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ALERT for Trustee Guide to GC Direct OnboardingALERT for Trustee Guide to GC Direct Onboarding

This document focuses on GC Direct information, the onboarding steps required to implement GC Direct, and the SSI monitoring process for trustees.

May 01, 2018

 

For an introduction to the Regional Custodian workflow, watch the below video:

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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 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.

 

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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The ALERT Global Custodian Direct (GC Direct) workflow automates the exchange of standing settlement instructions (SSIs) between a custodian's central repository and the ALERT host using dedicated ISO 20022 compliant messages. This enhanced custodian/prime broker access enables the global custodian/prime broker to become the owner and maintainer of the SSI data, effectively creating the "golden copy" of SSI data within the ALERT platform.

This area of the Learning Center has been organized to provide general learning materials to support GC Direct (GCD), as well as specific learning materials that cater for the different client types that can be involved in the implementation of GCD - global custodians, investment managers and regional custodians or trustees.

 

Parties Involved in GCD Process

Custodian

The global custodian (GC) becomes the owner and maintainer of the SI data (SI controller) through a direct connection to the ALERT database. When the investment manager links their account (Access Code) to the GC as the SI Controller, the GC will submit SSIs for the account and the investment manager is notified of the new SSIs through an Alert message. From this point forward, the GC is responsible for updating and maintaining the SSIs for that account.

More detailed information about the roles and responsibilities of a GC in this workflow can be found at GCD for Global Custodians.

Investment Manager

When the investment manager makes the GC the SI Controller, they must also supply their A/C# at Global Custodian so thatt 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 acces.

More detailed information about the roles and responsibilities of an investment manager in this workflow can be found at GCD for Investment Managers. Of particular importance is the Pre-GCD Conversion Process.

Regional Custodian / Trusee

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 their account to the regional custodian who in turn assigns the account to the global custodian. The global custodian supplies SSIs for open markets, whilst the regional custodian supplies SSIs for markets not maintained by the global custodian.

More detailed information about the roles and responsibilities of a regional custodian/trustee can be found at GCD for Regional Custodians/Trustees.


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The below table outlines which custodians are already live on GCD with the countries, securities and methods they support (last updated 24-Jun-2019).

Custodian name  Acronym Collateral supported? Excluded countries Supported security types via GCD Excluded methods BICs in use via GCD
BBH BBHGCD Y N/A

EQU / COB / TRY /

FX / CSH / MMT /

GDR / CON / 

Alternate security types

Universal

BBHCUS33XXX

BBHCUS33BOS

BBHCUS33LUX

BNY Mellon BNYGCD N N/A

EQU / COB / TRY/ 

TBI

CLS

Universal

IRVTBEBBXXX

IRVTBEBBDCP

IRVTUS3NXXX

IRVTUS3NIBK

Citibank CITIGCD N N/A

EQU / COB / TRY / 

FX / MMT / MSC

CLS

Universal 

CITILULXXXX

CITIGB2LXXX

CITIUS33XXX 

HSBC

HSS01GCD

HSS02GCD

N N/A

EQU / COB / TRY / 

FX / CSH / MMT

CLS 

Universal

HSBCHKHIXXX

HSBCHKHHGCA

MIDLGB22XXX

HSBCHKHHGCC

BBDAHKHXXXX

BBDASGSXXXX

BBDABMHMXXX

BBDABMHPXXX

BBDALULXXXX

JP Morgan JPMGCD N N/A

EQU / COB / TRY / 

FX / CSH / MMT

GDR / CON /

Alternate security types

CLS

Universal

CHASGB2LXXX

CHASUS33XXX

CHASLULXXXX

CHASGB2LTPA

CHASUS33IVS

CHASNOKKOSL

Northern Trust NTGCD N

BR; CL; CN; CO; 

CR; EQ; GR; IN; 

SA; KR; TW; TZ;

TR; AE; UA; VE;

VN; CI; ZW

EQU / COB / TRY /

FX / CSH / MMT

CLS

Universal

CNORGB22XXX

CNORUS44XXX

State Street SSBGCD N N/A

EQU / COB / TRY / 

FX / CSH / MMT / 

MSC

CLS

Universal

SBOSUS3FXXX

SBOSUS3CXXX

SBOSGB2XXXX

SBOSHKHXXXX

SBOSUS3NXXX

SBOSAU2XXXX

SBOSUS33XXX

SBOSCATXXXX

SBOSUS3XXXX

Sumitomo SMTBGCD N N/A

EQU / COB / TRY / 

MMT / MBS / GNM / 

FRM / FNM / AGS / 

NSD / BAS / FIN 

CLS

Universal

STUSUS33XXX

STBCLULLXXX


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Overview

In the GCD workflow, the global custodian (GC) becomes the owner and maintainer of the SI data. This requires the GC to be set up up with an ALERT acronym which the buy-side client links their account to. SSIs will then be returned for all markets that the custodian has open and available in ALERT and will be attached to the buy-sides' ALERT accounts. Any future updates to the SSIs will flow directly to the buy-sides linked accounts. 

 

Adopting GCD

The pdf ALERT Global Custodian Direct Adoption Playbook (1.09 MB)  shares information and best practices around processes to build to the GC Direct workflow and helps custodians prepare for and successfully execute on the migration of the client community to this new workflow.

It has been organized into a client journey map that includes the below five phases - for each phase the context is set with overarching goals to be met and key activities to be performed, along with links to relevant resources to help execute against this plan.

GCD Adoption


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The below documents provide global custodians who are looking to implement GCD with detailed information on creating and receiving global custodian messages that flow between their system and the ALERT platform.

Resources include, but are not limited to:

Resource  Tasks
Business/System Analysts Map market-specific settlement instructions to/from ISO SSI standard message formats 
Database Architects Ensure the use of an efficient database structure
Developers Build maps to/from the database to an xml schema and ensure a secure and controlled systemic process
MQ Administrators Configure MQ connectivity

 

ALERT GCD Technical

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ALERT GC Direct 1.0 Interface: XSD FileALERT GC Direct 1.0 Interface: XSD File

XSD file for the ALERT GC Direct 1.0 interface.

Oct 02, 2017
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ALERT Global Custodian 1.0 Direct XML Message SpecificationALERT Global Custodian 1.0 Direct XML Message Specification

Contains the messages, data dictionary, and error codes for the ALERT Direct Global Custodian 1.0 client interface.

Jul 18, 2019
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GCD users also have the option to access the ALERT web user interface which provides the following functionality:

  • View account and SI information
  • Access and download self-service reports of SSI and account information
  • Use SI Scan to check that SI information conforms with market rules and validations
  • Upload new SSIs

 

Further information about the Web Interface can be found in the  pdf ALERT Global Custodian Direct Web Interface User's Guide (1.52 MB) or in the video below: