Japan’s Higo Bank taps DTCC’s ITP Services to fuel trade lifecycle

By Gloria Mathias

The Depository Trust & Clearing Corporation (DTCC), the post-trade market infrastructure for global financial services, has been adopted by Japan’s Higo Bank to automate its middle and back office, helping it achieve no-touch processing across domestic and cross-border transactions.

Higo Bank, the Japanese regional bank in Kumamoto Prefecture, selected CTM, including CTM’s Match to Instruct (M2i) workflow, ALERT, and Settlement Instruction Manager, to further automate its equities and fixed income post-trade processing. By increasing automation in this critical area, Higo Bank has removed manual touchpoints and created a faster and more efficient post-trade process, allowing it to reduce risk and costs.

The adoption of ITP’s suite of services comes at a critical time. Following the successful transition in the US in May 2024, jurisdictions around the world are considering moving to the T+1 settlement.

Kazuyoshi Uchiyama, Senior Executive Officer and General Manager of the Financial Markets Division of Higo Bank stated, “The global focus on shortening settlement cycles, as well as the need to comply with the operational risk measurements set by the Basel Accords to enhance internal controls and strengthen human capital, has made straight-through processing essential across operational workflows, from trade execution to settlement. At the same time, increased volumes and manual processes create risk and lengthen settlement processes. For these reasons, we are very pleased to have adopted DTCC’s ITP services to automate our post-trade process further, increasing efficiency and reducing risk.”

CTM, DTCC’s platform for central matching of cross-border and domestic equity and fixed-income transactions, automates the trade confirmation process. CTM’s M2i workflow leverages CTM’s central matching capabilities and Standing Settlement Instruction (SSI) enrichment via DTCC’s ALERT.

With the M2i workflow, trades that are allocated, confirmed, and matched in CTM by the institutional investment manager and their brokers will automatically trigger trade affirmation and delivery of instructions for Depository Trust Company (DTC)-eligible securities directly to the U.S. depository for settlement. When used in conjunction with Settlement Instruction Manager, users can automatically generate and send settlement instructions to custodians and other third parties.

“We are happy to collaborate with Higo Bank in bringing greater post-trade processing efficiency to the region,” said Val Wotton, Managing Director and General Manager of DTCC ITP. “ITP’s functionality is unique in its ability to enable counterparties to reach settlement finality faster while also connecting to thousands of global counterparties.”