Custody T+1

The affirmation is a common dual process in the US market, where a broker confirms a trade through the TradeSuite ID system and the affirming party (investor or an agent like HSBC as custodian) acknowledges the details and affirms the trade. In other markets, this process could be referred to as a matching process at the central depository level.

It is DTCC’s system for affirmation. In institutional trading, the broker confirms a trade using TradeSuite ID, then the investment manager or its agent (such as a custodian like HSBC or prime broker) affirms the details of the trade.

The new market cut-off for affirmations at DTCC’s TradeSuite ID system will be Trade Date (TD) at 9pm EST. Clients who will be self-affirming should adhere to this market deadline to ensure comply with the SEC rules.

A number assigned and used in the TradeSuite ID system to properly identify the parties on a trade confirm/affirm. It is important to mention that each broker’s, investor’s, custodian’s, or market participant’s TradeSuite ID number will be unique and different from the others.

A TradeSuite ID number will allow clients to self-affirm the broker’s confirm in the TradeSuite ID system and will also allow to keep records of the affirmations.

Yes. Even if the confirm is not affirmed before the 9pm EST, trades can settle through a process called Delivery Order “DO”. For the US market, there are two DO processes: a) Night Deliver Order (NDO) on T, or b) Day Deliver Order (DDO) on T+1.

Yes, clients electing self-affirmation models will be able to self-affirm the clients’ broker confirmation using their own TradeSuite ID number and will also allow to keep records of those affirmations.

Yes, it is recommendable for all our clients to engage with their brokers to understand their readiness for T+1, and most importantly regarding the affirmation process. Brokers are very important players in the affirmation, as they process the confirm that will need to be affirmed in the DTCC’s TradeSuite ID system.

It is DTCC’s web-based service to electronically archive and retrieve the trade confirmations, allowing clients to comply with the record keeping rule changes. According to DTCC, clients will be able to access up to 10 years of confirmation history.

We've implemented systems and processes to accommodate the shortened T+1 settlement cycle, and we encourage clients to be mindful of the compressed decision-making timeframe.

We have a dedicated team to manage market claims. While there may be a temporary increase in market claims, we envisage this should subside as the markets adjust to the shortened settlement cycle and stabilize.

Neither HSBC Global Custody nor HSBC USA as sub-custodian are not able to provide clients with records of when affirmation takes place. Where clients do not have an existing record agreement, we recommend that clients approach the DTCC to discuss use of DTCC Confirm Archive solution for record keeping purposes.

Yes, under the current T+2 settlement cycle operating model, HSBC USA (“HBUS”) acting as the sub-custodian in the US market is affirming on behalf of client's trades alleged against the HBUS omnibus TradeSuite ID.

Yes, HSBC USA (“HBUS”) is the sub-custodian in the US market and therefore has their own Institutional TradeSuite ID.

Clients may use M2i or other platform / system to perform their affirmations. However, HSBC Global Custody (“GC”) will not use M2i and therefore will still expect to receive from the client all the trade settlement instruction MT541/43 (just like today) which will process on our GC system and route to our sub-custodian HBUS for final settlement at DTCC. The HSBC GC Target Operating Models for T+1 will not support M2i where DTCC use an affirmed trade to generate a settlement instruction at the DTCC. All trade instructions will need to be sent to the GC.

No, currently DTCC fees are absorbed by HSBC. At this time, we do not envisage that this will change.

HSBC’s global custody deadlines for cash funding instructions will remain unchanged under T+1.