In an exclusive Q&A with Fintech Business Asia , Val Wotton, Managing Director and Global Head of Equities Solutions at DTCC, discusses how the firm’s CTM® tri-party matching workflow is helping hedge funds, prime brokers, and executing brokers prepare for the industry’s shift to T+1 settlement. From delivering real-time “golden copies” of trades to reducing operational risk through SSI enrichment and PSET matching, Wotton explains why automation and data standardisation are essential for efficiency, resilience, and global market alignment.

Q1. How does adopting DTCC’s CTM tri-party matching workflow help firms prepare markets shift towards T+1 settlement in Europe and beyond?

DTCC’s CTM® tri-party matching workflow is designed to streamline and automate trade communications between hedge funds, prime brokers, and executing brokers. By standardizing the delivery of hedge fund trades to prime brokers and automating the matching process, CTM’s tri-party matching capabilities ensure timely communication of transaction details and enable a seamless, efficient trade processing flow. This is especially critical as markets transition to T+1 settlement, where speed and accuracy are paramount.

The workflow leverages CTM’s automated central trade matching functionality, supplying prime brokers with a “golden copy” of transaction details when a match occurs between a hedge fund and an executing broker. This reduces manual intervention and mitigates the risk of errors. As more firms adopt this workflow, the industry benefits from increased efficiency, reduced settlement risk, and enhanced transparency.

Q2. Current post-trade processes often face fragmentation and delays. Can you share what levels of efficiency gains or risk reduction you expect to achieve through this automated golden copy model?

Fragmentation and delays in post-trade processes are common challenges, especially when trade details are communicated in various formats and at different times. The CTM tri-party matching workflow addresses these issues by ensuring that all parties to a trade have access to the “golden copy” of transaction details when a match between the hedge fund and executing broker occurs. The CTM Prime Brokers workflow also provides the agreed place of settlement (PSET) and a full set of corresponding standard settlement instructions (SSIs) to the prime broker, so they instantly know who, where and how they need to settle the hedge funds transaction.

Efficiency gains include:

• Automated real-time trade notifications: Prime brokers receive immediate updates, reducing the time between trade execution and settlement. 
• Standardized communication: The workflow synchronizes trade communications to all prime brokers, eliminating discrepancies and manual reconciliation.
• Intelligent recipient identification: Prime broker recipients are identified via the golden source SSI database, ensuring accurate delivery of trade details.

• Enhanced transparency: Transactions are enriched with the correct SSIs, providing clear settlement instructions and reducing the risks of errors.  Many trade fails are caused by inaccurate or missing SSIs, often due to the manual exchange of SSIs. ALERT®, DTCC’s global database for SSIs, enables secure and efficient management and sharing of settlement instructions to facilitate trade settlement.

• Reduced settlement risk: Increased use of PSET matching through CTM minimizes the likelihood of settlement failures.

By automating these processes, firms can expect significant reductions in operational risk, fewer trade fails, and improved compliance with regulatory requirements. The model also supports scalability, allowing firms to handle increased volumes without proportional increases in resources.

SSI enrichment refers to the process of automatically including the most up-to-date and accurate SSIs from DTCC’s ALERT database with each trade being processed. This ensures that SSIs are accurate, standardized, and validated before processing, reducing errors and enhancing transparency. 

In the CTM workflow, increasing the use of PSET matching means that the system automatically validates and matches the settlement location for each trade, minimizing manual intervention and reducing the risk of errors. Automating this process is especially important for markets in the EU, which have more than 30 CSDs. Together, PSET matching and SSI enrichment via ALERT are critical for timely and efficient post-trade processing, especially under T+1 settlement timelines where there is less time to resolve discrepancies. 

Q3. The move involves hedge funds, executing brokers, and prime brokers. What challenges remain in getting wider industry adoption of automated workflows, and how are you encouraging alignment?

Achieving broader industry adoption of automated workflows – such as DTCC’s CTM tri-party matching model – requires addressing a few persistent challenges:

• Legacy systems: Many market participants still rely on older infrastructure that may not be compatible with modern automated workflows. Upgrading these systems requires investment and careful change management.
• Operational inertia: Firms may be hesitant to change long-standing processes, especially if current workflows are perceived as adequate or when the cost-benefit of automation is not obvious at the beginning.
• Data standardization: Ensuring consistent data formats and definitions across counterparties is essential for automation to work effectively, such as the use of PSET data and golden source SSIs. 

The industry must recognize that the coexistence of multiple messaging formats and data standards introduces operational risk and inefficiencies throughout the trade lifecycle. To mitigate these challenges – especially under compressed settlement timelines – standardization and automation of key data elements, such as the Unique Transaction Identifier (UTI) and Standard Settlement Instructions (SSI), are increasingly critical. Firms should therefore adopt automated central matching solutions that incorporate golden source SSIs and generate UTIs at the start of the trade lifecycle. Doing so will help prepare the industry for the transition to T+1 settlement.

To foster alignment and accelerate adoption, DTCC is actively driving several initiatives”

• Industry collaboration: Engaging with market participants, industry groups, and regulators to promote best practices and harmonize standards like the assignment of Unique Transaction Identifier (UTI) early in the trade lifecycle, allowing for full traceability and exception management of the trade.
• Client Collaboration: Partnering with our clients to promote the benefits of post-trade automation and introducing enhanced workflows to reduce operational risk and increase settlement efficiency.

• Education and outreach: Providing resources such as webinars, white papers, and working groups to help stakeholders understand the benefits and implementation pathways.
• Pilot programs: Allowing firms to test the workflow in controlled environments to reduce perceived risk and gather feedback. 
• Support and training: Offering comprehensive support to ensure smooth onboarding and ongoing success

Q4. Beyond the UK, EU, Switzerland and Liechtenstein, do you see CTM’s tri-party model becoming a blueprint for T+1 settlement readiness in Asia-Pacific or North America?

The CTM tri-party matching model is highly adaptable and scalable, making it well-suited for markets beyond Europe. 

DTCC’s CTM tri-party matching workflow is currently only available in non-U.S. securities markets. However, U.S.-based hedge funds that trade in international markets will see the benefits of this automated workflow having been adopted by their non-U.S. based prime brokers. The workflow leverages CTM’s automated central matching functionality and provides prime brokers with a golden copy of transaction details when a trade match between a hedge fund and an executing broker takes place, bringing real-time standardization and automation to the trade allocation process.

CTM’s tri-party matching workflow creates a foundation to unlock additional clearing opportunities in non-U.S. securities markets. The workflow will eventually provide Central Clearing Counterparty (CCP) connectivity and introduce similar netting and clearing opportunities in the U.K. and E.U. that U.S. Hedge Funds and U.S. Prime Brokers benefit from in U.S. securities markets. 

While settlement cycles and infrastructure maturity vary across countries in Asia Pacific, United Kingdom, and the EU, there is a growing interest in harmonizing processes and adopting best practices that support efficiency and risk reduction. The CTM tri-party matching model offers a flexible framework that can be tailored to local market conditions while providing the global consistency needed for cross-border trading.

Key factors supporting the model’s expansion include:

• Interoperability: CTM integrates with a wide range of systems and counterparties.
• Regulatory alignment: The workflow supports compliance with evolving regulatory requirements.
• Clearing Opportunities: The CTM tri-party matching workflow will create a foundation to unlock additional clearing opportunities for institutional client flow, through direct CCP connectivity
• Global reach: With over 6,000 clients in more than 89 countries, CTM is already a trusted solution for streamlining workflows worldwide.

As markets continue to evolve, DTCC’s CTM tri-party matching workflow is well-positioned to support T+1 settlement readiness on a global scale.

Q5. Both firms plan to go live by end-2025. What are the key milestones in this rollout, and how confident are you in meeting them without disruption to existing trading flows?

Key milestones in the rollout for the planned go-live include:

• System integration and testing: Ensuring seamless integration of CTM tri-party matching workflow into existing trade processing systems and conducting thorough end-to-end testing.
• Counterparty onboarding: Engaging with hedge funds, executing brokers, and prime brokers to ensure readiness and provide the necessary training.
• Pilot phase: Running live trades through both existing and CTM workflows to compare outcomes and identify any issues.
• Full production rollout: Transitioning all eligible trades to the CTM tri-party workflow and establishing support protocols for post-launch success.

In this context, 'support protocols' refer to the structured procedures and resources that are put in place to help ensure a smooth transition during the rollout or implementation – especially when introducing new systems like CTM’s tri-party matching workflow. These protocols are essential for maintaining operational continuity and confidence during the transition to the new workflow—especially in a high-stakes environment like post-trade processing under T+1 timelines.

DTCC is committed to meeting these milestones, thanks to strong project governance, collaborative engagement with market participants, and a comprehensive implementation strategy that enables full deployment from the outset.  Robust contingency planning, a scalable infrastructure and ongoing support will further ensure a smooth transition without disruption to existing trading flows.

DTCC’s CTM tri-party matching workflow represents a pivotal advancement in post-trade automation, supporting market participants as they prepare for T+1 settlement across multiple regions. By streamlining trade communications, reducing operational risk, and enhancing transparency, the workflow delivers tangible benefits to hedge funds, prime brokers, and executing brokers alike. BNP Paribas and JP Morgan are among a growing community of prime brokers adopting CTM’s prime broker matching workflow. This tri-party matching model enables real-time standardization and automation of trade allocation and matching – expediting transaction processing and driving improvements in settlement efficiency.

DTCC is also developing a central counterparty (CCP) workflow that will allow matched tri-party transactions to flow automatically to a CCP – enabling netting and clearing for mutual clients. These enhanced workflows are expected to deliver significant automation benefits for prime brokers and hedge funds globally and serve as a key enabler for firms preparing to adopt T+1 settlement in Europe by October 2027. As the industry continues to evolve, DTCC remains focused on driving innovation and supporting the needs of the global financial community.