A#: 7145 P&S#: 6715 DATE: JANUARY 19, 2011

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1 A#: 7145 P&S#: 6715 DATE: JANUARY 19, 2011 TO: ATTENTION: FROM: SUBJECT: ALL PARTICIPANTS MANAGING PARTNER/OFFICER; P&S MANAGER, CASHIER; OPERATIONS MANAGER; DATA PROCESSING MANAGER, IT MANAGER PRODUCT MANAGEMENT SERVICE TRADING RELATIONSHIP MANAGEMENT SYSTEM TO REPLACE 9A/9B MANUAL FORMS National Securities Clearing Corporation ( NSCC ) has begun implementing Universal Trade Capture ( UTC ), the most comprehensive redesign of its trade capture system in decades, during the first quarter of For more details about UTC and the overall testing and implementation schedule, see Important Notice A#7030, P&S#6601, dated July 21, In connection with the implementation of UTC, NSCC plans to implement a self-service Trading Relationship Management System that will replace the current manual paperbased process used to manage Qualified Special Representative ( QSR ) and Correspondent Clearing Relationships used in UTC trade editing. NSCC uses these relationships to manage broker submitted, locked-in trade data by ensuring a correspondent broker (9B) allows a QSR or Special Representative to submit locked-in data on its behalf. The current agreements (see used by NSCC Members to request the set up or termination of QSR and Correspondent Clearing relationships will be replaced by a self service online system effective in April, 2011, on a date to be announced by subsequent Important Notice. The new Trading Relationship Management System (the System ) will allow Members to include their correspondent identifiers, as well as clearing broker number, in the agreement with NSCC. If Members choose to include a correspondent in the agreement, NSCC will only accept locked-in data when both the 9B clearing broker and 9B executing broker (correspondent) are identified in the agreement. This feature is optional for Members. The System will be available for loading data starting on February 1, 2011, however, information entered into the System after February 1, 2011 will have no impact on production trades until deployment of the System in production, scheduled for April, Information in the System on the deployment date will be uploaded to production at that time. The specific deployment date will be announced by DTCC is now offering enhanced access to all important notices via a new, Web-based subscription service. The new notification system leverages RSS Newsfeeds, providing significant benefits including real-time updates and customizable delivery. To learn more and to set up your own DTCC RSS alerts, visit

2 Important Notice. See Implementation Schedule at the bottom of this Important Notice for more information. All changes to existing QSR and Correspondent Clearing relationships that are intended to be effective prior to deployment in April, 2011 must still be submitted to NSCC through the existing paper agreements available at or from your relationship manager. Members are encouraged to access the System as soon as possible to become familiar with its functionality. This notice describes: 1. Self Service Trading Relationship Management System 2. Sponsored Accounts 3. Who Can Use the System and How to Get Access to the System 4. Implementation Schedule 5. Who to Contact Self Service Trading Relationship Management System Key Features and Benefits The new System will replace the existing 9A and 9B paper agreements (see link above). The DTCC Web Direct based application will automate the method by which Members establish, monitor and maintain QSR and Correspondent Clearing trading relationships. All existing relationships in effect on the deployment date will be migrated to the System and will be available for ongoing maintenance. In addition to self-service capabilities, new functionality includes: 1. Intraday relationship changes (including deletes) 2. Effective Dates for additions and modifications 3. Definition of Executing Broker level relationships to support UTC trade editing 4. Search and view existing relationships 5. Spreadsheet uploads of new relationships and download of existing relationships 2

3 System Functionality Login The System can be accessed from the DTCC home page ( and by clicking on the DTCC Web App Login link in the upper right corner of the page: 3

4 The DTCC Login page will appear: Once the User ID and Password are validated, and the DTCC Portal home page is presented, click on the TREL link to access the System: 4

5 Participant ID Selection Select the NSCC Participant ID if you have been granted access to more than one Participant ID: If the user is granted access to only one NSCC Participant ID, they will land directly on the Trading Relationship Management Dashboard (the Dashboard ) screen: The Trading Relationships Pending section on the Dashboard screen will list relationship requests for the currently selected participant account that have been submitted by the counterparty and are pending your action. 5

6 The Trading Relationships Pending with Others section on this screen will list relationship requests that have been submitted by the currently selected participant account and are pending action by the counterparty. The Spreadsheet Errors section will list the spreadsheet uploads that contain formatting errors to be addressed before they can be successfully processed. Create Trading Relationships It is strongly recommended that the initiation of and any updates to trading relationships continue to be coordinated directly between Members prior to entering them into the new System, as they are today. Roles Two types of trading relationships can be managed via the self service System: 1. Qualified Special Representative (QSR), and 2. Correspondent Clearing. 1 Two parties, or roles, are required for a QSR relationship - the Qualified Special Representative and the Correspondent. Similarly, Correspondent Clearing relationships are between a Special Representative and a Correspondent. Either party can create a new trading relationship. The relationship counterparty will need to approve the relationship before it becomes active in the System. If a trade fails UTC edits due to an undefined Trading Relationship (Clearing Member or Executing Broker Level), intraday changes can be used to add the relationship that caused a trade to pend in UTC. UTC will periodically process pended transactions throughout the day using currently active trading relationships. Any unresolved pended items will result in trade rejects at the end of the processing day. Effective Dates Trading relationships are created intra-day by one Member and approved by the counterparty by specifying a Requested Effective Date equal to the current business day. Once approved, the update will be made in near real-time (less than five minutes). Trading relationships can also be created with a future effective date. Once approved by the relationship counterparty, the trading relationship will be effective for the first business day on or after the effective date. As a result, relationships may have a Requested Effective Date that is different than the Actual Effective Date. 1 These terms are defined in NSCC s Rule 7. 6

7 In order to create a new Trading relationship, click on the New Relationship tab from the Trading Relationship Management Dashboard screen. 7

8 The trading relationship details are entered on the screen below: Trading Relationship Information Trading Relationship Type Select either Qualified Special Representative (QSR) or Correspondent Clearing. QSR Execution Platform Select an SEC approved ATS from the dropdown list. Requested Effective Date Specify the date the relationship should be effective. It can be the date of entry or a future date. Trading Relationship Role Select the role your firm is playing in this relationship. For QSR relationships, select either QSR or Correspondent. For Correspondent Clearing relationships, select either Special Representative or Correspondent. The selection you make in this field will cause your information to be populated in the appropriate section below. Executing Broker ID for Trade Editing Select either Yes or No. A selection of Yes indicates both parties to the relationship have agreed to edit trades between them 8

9 using the Executing Broker ID(s) specified in each subsequent section. A selection of No indicates that trades will be edited at the Clearing Member level. Qualified Special Representative/Special Representative Information Participant ID This field will display your currently selected NSCC Participant ID if the Trading Relationship Role selected in the previous section is QSR or Special Representative. Participant Name This field will display the name of the NSCC Participant associated with the ID displayed above. When the parties to the relationship agree to edit trades at the executing broker level, at least one row must be added in the Qualified Special Representative/Special Representative Executing Broker IDs section. Select Add to open new rows and select Delete to remove rows. Selecting All will allow you to either add or delete all selected rows. Executing Broker ID Enter the executing broker ID (MPID) that will be submitted on the trade and used for editing. Requested Effective Date Specify the first day the executing broker ID will be used for editing. Deletion Effective Date If the executing broker ID has been deleted, specify the effective date of the deletion in this field. Status This field indicates the status for this executing broker ID as either Saved, Active, Pending Approval or Pending Delete Approval. Correspondent Information Participant ID This field displays the currently selected NSCC Participant ID if the Trading Relationship Role selected in the previous section is Correspondent. Participant Name This field displays the name of the NSCC Participant associated with the ID listed above. When the parties to the relationship agree to edit trades at the executing broker level, at least one row must be added in the Correspondent Executing Broker IDs section. Select Add to open new rows and select Delete to remove rows. Selecting All will allow you to either add or delete all selected rows. Executing Broker ID Enter the executing broker ID (MPID) that will be submitted on the trade and used for editing. Requested Effective Date Specify the first day the executing broker ID will be used for editing. 9

10 Deletion Effective Date If the executing broker ID has been deleted, identify the effective date of the deletion in this field. Status Indicates the status for this executing broker ID as either Saved, Active, Pending Approval or Pending Delete Approval. 10

11 Executing Broker Level Edits Parties to a relationship may choose to include Executing Broker level information in the agreement with NSCC. Members can establish this additional edit criteria by setting the Executing Broker Level Edit field to Yes and specifying an effective date agreed to by both parties to the relationship. Executing Brokers can be added even if the Executing Broker Level Edit field is set to No. At least one Executing Broker is required for the Special Representative/QSR and correspondent in order to enable the edit. Choose to Save the details to continue editing later. Once all the data is entered, Submit the request. 11

12 Approve Trading Relationships Trading relationships pending action will be displayed on the Trading Relationship Management Dashboard screen: TEST 12

13 From the Dashboard, select any item pending approval by clicking on a party to the relationship: TEST EXB1 12/31/9999 BRK9 12/31/9999 If the relationship approval request is at the Member level, the available actions are approve or reject. If the relationship approval request is at the Executing Brokers level, the approver can choose to approve or reject the entire relationship or take different actions for each Executing Broker specified on either side of the relationship. Any approval at the Executing Broker level implies the approval at the Clearing Member level. 13

14 Search Trading Relationships The System supports searching for trading relationships based on any of the fields describing a relationship. All relationships that meet the search criteria will be displayed. The user will be able to view the details of a relationship and take action if necessary TEST Change Trading Relationships Existing Trading Relationships can be modified and/or deleted by an authorized user on either side of the relationship. Possible modifications that may be made to a Trading Relationship include: 1. Enable Executing Broker level editing for a Trading Relationship. 2. Add an Executing Broker to an existing relationship (at least one Executing Broker must be specified for each side of the relationship). 3. Delete entire relationship between clearing firms. 4. Delete an Executing Broker from an existing relationship. 14

15 Additions or modifications to an existing relationship require approval from the counterparty to the relationship. Although the deletion of a relationship does not require approval from the counterparty, a second individual from the same firm is required TEST EXB1 12/31/9999 BRK9 12/31/9999 An individual from the counterparty Member firm must access the System, find the pending request on their Dashboard (see Approve Trading Relationships above) and take an appropriate action. Once the change is approved or rejected, a notification will be delivered to alert the initiating counterparty that the request was successfully processed. Deleting Trading Relationships The System will delete trading relationships intraday or with a future effective date. The delete request can be entered by either party to the relationship. The entire Trading Relationship or just selected Executing Brokers can be deleted from the relationship. 15

16 Delete requests can be created by users at either firm. Another individual with the appropriate entitlement within the same firm must approve the delete request before it becomes effective. The counterparty to the relationship is not required to approve a delete request. As with intraday update, the delete will be updated in trade editing near real time (less than 5 minutes). At that point any submitted trades containing the relationship will be pended and subsequently rejected at the end of the processing day. Upload Trading Relationships The new System will support the upload of trading relationships using a Microsoft Excel spreadsheet. A spreadsheet template will be available in the System. It can be used for a bulk upload of new Trading Relationships, including the addition of Executing Brokers for existing relationships. The Upload screen is accessed by clicking on the Upload Tools tab from anywhere in the application TEST The upload process will validate the data in the spreadsheet. If any errors are encountered, the spreadsheet will not be processed and the errors will be available for Members to review. If the spreadsheet passes all validation, the requests will be processed synchronously. The System will process uploads as if they were directly entered by a user. Updates will become effective after all approvals are received and the effective dates are reached. The uploaded spreadsheets will be stored in the System and can be searched and viewed from the Upload Tools tab. Sponsored Accounts Trading relationships for Accounts sponsored by an NSCC Member (e.g. The Canadian Depository for Securities Limited) will also be managed using the new System. The only difference in functionality for these trading relationships is that an individual from the 16

17 Sponsoring firm will also be required to approve the creation of new Trading Relationships changed to existing Trading Relationships for a Sponsored Account. Who Can Use the System? Individuals at Member firms that use NSCC s QSR and Correspondent Clearing Services as either a QSR/Special Representative or Correspondent will need to request access to the new System from their Access Coordinator (see How to Get Access to the New System below). There are four user types, each with separate permissions in the new System: 1. Inquiry Only 2. Update (including Delete) of a Trading Relationships 3. Approve New/Modified Trading Relationships 4. Approve Delete of a Trading Relationship At least two individuals are required to have access and appropriate permissions in order to process approvals for relationship deletes. When a trading relationship is deleted in the System, a second individual from the same Member firm is required to approve the delete request. Member firms should institute procedures to have individuals periodically check the Trading Relationship Management System Dashboard for requests pending their attention. If a Member has more than one NSCC Participant ID, the Member will be able to access and manage all of its NSCC accounts in a single session. Members with more than one NSCC Account will be asked to choose a Participant ID from a drop down box each time they login to the System to specify the NSCC Account undergoing action. Once the Member is logged in, the option Choose Another Participant ID will be available from the top menu bar. How to Access to the New System Access to the Trading Relationship Management System is controlled by individuals designated as Access Coordinators at the Member firm. Access Coordinator Authorization forms and Guides are located at: The information needed before you request access to the product includes: 1. Basic contact information 2. Product name: Self Service for Trading Relationships 17

18 3. NSCC Clearing Numbers involved in the trading relationships 4. Permission being requested: a. Inquiry Only b. Update (including Delete) Trading Relationships c. Approve New/Modified Trading Relationships d. Approve Delete of a Trading Relationship Please contact webrsg@dtcc.com or call (Option 5 then Option 2) to identify the Access Coordinator at your firm. If an Access Coordinator has not been setup please follow the instructions at: Implementation Schedule When the Trading Relationship Management System becomes available for data loading on February 1, 2011 it will be populated with QSR and Correspondent Clearing relationships active as of that date. Members can begin confirming and managing their trading relationships in the new System on February 1, 2011 for verification purposes. Members will also have the opportunity to become familiar with the System, and to setup and verify the Trading Relationship data loaded into the System before the Executing Broker level edits go live on the deployment date, expected to be in April, 2011, on a date to be announced by subsequent Important Notice. IMPORTANT: Any changes made to data in the System between February 1, 2011 and the deployment date will not impact any production trades submitted to UTC during that period, but will be deployed into production in April, 2011, on a specific date to be announced by subsequent Important Notice. These changes will be effective in production either on deployment date, or on a later date as specified in the System by the counterparties to the relationship. The specific deployment date will be announced by a separate Important Notice. Changes made in the System between February 1, 2011 and the deployment date will be used to edit UTC trades submitted to the NSCC Participant Test (PSE) environment during the testing period. In order to access the System and fully exercise the new functionality, member firms will need to: 1. Register for the Trading Relationship Management System. Please see How to Get Access to the New System, above. At least two individuals should register in order to test the delete of a trading relationship and the required supervisory approval. 18

19 2. Coordinate with a counterparty that also has access to the System (required to exercise the approval process for adding new relationships). 3. Submit QSR and Correspondent Clearing trades to UTC in the NSCC Participant Test environment. Webinar sessions will be held on Tuesday January 25, Thursday January 27, Tuesday February 1 and Thursday February 3, from 2:00-3:00 EST. Members may register for these webinar sessions at For more information, please contact your Relationship Manager. Who to Contact For questions about this Important Notice, please contact your Relationship Manager, NSCC Account Administration at nsccaa@dtcc.com or the undersigned at jyelle@dtcc.com. John Yelle Product Manager Customer and Security Reference Data 19