Contributing to the development of the capital market

MS. NELLIE DAGDAG Managing Director DTCC (DEPOSITORY TRUST & CLEARING CORP.)

As managing director of New York-based DTCC (Depository Trust & Clearing Corp.) in the Philippines, Ms. Nellie Dagdag is involved and active in every part of the world, not just in the Asia Pacific.

Dagdag’s work ensures that DTCC, a post-trade, clearing and settlement company for the financial sector, is indeed prominent in the region. The Manila office is considered a key operational center in this part of the globe.

Before she was hired to take over its Philippine operations, Dagdag, a certified public accountant, was president and CEO of the Philippine Central Depository, Inc. (PDC), now known as the Philippine Depository & Trust Corp., in 1999. She is also a member of the ASEAN+3 Bond Market Forum, the ASEAN+3 Group of Experts and co-chair of the Philippine National Market Practice Group.

Dagdag credits her stint with the PDC as one of her stepping stones, a “first achievement” as it gave her the “unique opportunity to lead a great organization.” PDC provided both broker and investor support.

“It was definitely one of my career highlights,” she said. “I’ve always embraced challenges and new opportunities throughout my career, and the appointment as CEO was no different.”

As PDC chief, she and her team made plenty of changes such as computerizing book-entry process from paper-based settlement of trades. She also led initiatives for a faster and more accurate corporate action processing, more efficient initial public offerings and paving the way for the Philippine Stock Exchange to implement a central counterparty clearing house and adopt the global best practice of Delivery versus Payment for settlement of trades, according to her.

Today, as the person responsible for growing DTCC in Manila, she considers this the second achievement in her work life. Under her watch, the company has hired more people for the expanding business. They now employ 384 from just 181 in 2013 with DTCC here becoming an integral part of its global location strategy. “It is a win for the Philippines because expanding DTCC operations here positively impacts the BPO (business process outsourcing) industry’s contribution to our economy,” she said.

Dagdag is committed to staking her claim in the Philippine growth story by participating in the development of the capital market infrastructure. First, as PDC and now more globally, as DTCC.

“That was the main reason for my joining the Philippine depository in 1995,” she said. “Being with DTCC now puts me in a better position to assist, since DTCC is an industry leader globally in its field and is committed to advancing initiatives that benefit the global marketplace, including the Philippines. For example, we share best practices and insights with regulators, industry bodies, infrastructure providers such as exchanges, clearing houses and depositories and with our clients who, by the way, are our owners.”

Post-trade financial services is a critical background to ensure a smooth and uninterrupted global capital markets. DTCC, with over 4,000 people in 16 countries, is on top of this environment.

“The toughest part of the job is striking the appropriate balance,” said Dagdag.

“With the industry looking to DTCC for greater support around compliance, risk and operational challenges, we have a unique opportunity to help our clients navigate through these priorities while reducing risk and costs. However, we also recognize the need to prioritize our initiatives.”

Global leader, regional focus

Dagdag’s typical day seems to be, at best, a mix of challenges and new opportunities.

“There are a number of challenges that firms face when operating in Asia-Pacific (APAC), but one of the most significant is the diversity of the region. Diversity comes in the form of varying degrees of alignment with global capital market operational standards, regulatory divergence and local market nuances such as language and market practices. These differences create a complex operational landscape for any firm operating in the region,” said Dagdag.

Demographics is another challenge, and then there are the regulatory issues. “Regulatory reforms are also impacting firms. Mandates from the West have found their way into APAC, affecting our client’s businesses and, by extension, the services that DTCC provides.” She cited the European Union’s MIFIR and MIFID2 mandates and the use of global identifiers for entities or legal entity identifiers and securities, such as stocks and bonds or international securities identification numbers.

“The mandates also call for the unbundling of research costs from commissions paid by funds to their brokers as well as reporting personal data to regulators for derivatives transactions,” said Dagdag.

“While these are EU regulations and directives, their impact crosses borders. As such, we are engaging with our clients globally to assess operational considerations and how DTCC solutions can help to reduce the costs and complexities of compliance.”

For the Philippine business, she said their services are utilized by all APAC markets, particularly in Malaysia and China.

“Like many other global firms operating in the country, the majority of operations DTCC performs in its Manila office service global markets. This is a key requirement to enjoy the benefits of accreditation with the Philippine Export Zone Authority,” said Dagdag.

As an industry expert, Dagdag’s take on things are received as valuable inputs by most. And she has valuable inputs on almost all segments of the capital and financial market.

In the last three decades, which was how long she has been in the industry, she noted significant advancements in the domestic environment. “We now have an electronic and demutualized stock exchange, a robust interbank real-time-gross-settlement system, a domestic US dollar payment and settlement system, a CSD that caters to equities, government securities and corporate bonds, and a fixed income exchange which was a pioneer in the ASEAN initiative when it went live 2005,” she said.

These are giant steps in the APAC context. There are more to do, she said, but commends the government agencies that are in-charge of advancing the capital market, such as the central bank, the finance department and the securities’ authority.

There is a long list of reforms and initiatives in the trading, payments and settlement areas, said Dagdag. “The list will always be longer than the resources available, so it is important that regulators continue to engage with market participants to understand how best to prioritize competing demands and/or identify short-term projects that could be implemented with lower resources or time.”

Still, she said the country has made great strides in the post-trade space, beginning in 1997 with the depository and in 1999, the launch of an equities clearing house and central counterparty system.

Most recent developments in the digitization of payments in the Philippines, Dagdag noted that the central bank’s National Retail Payment System is another game changer. In fact she was there in the initial stages of planning the NRPS 10 years ago.

The system was already launched and the first Automated Clearing Houses or ACHs for retail payments is now on. “These electronic retail payment platforms complement PhilPaSS (of the central bank) the existing interbank RTGS, and the Philippine Clearing House Corp.’s electronic check clearing platform. These developments will be of great benefit to DTCC, our employees and other firms across the Philippines,” she said.

Family first

Dagdag’s first priority, always, is family. Her work takes her all over the region and beyond the APAC, but there is only one place she comes home to.

“Weekends are family time,” she said. “Fortunately, my role at DTCC allows me to travel on weekdays and be home on the weekends, except on a few trans-Pacific or trans-Atlantic trips which may cross-over a weekend.”

Dagdag does not consider location issue as reason not to connect with family and friends. “Every Thursday or Friday regardless of where I am in Asia, my most important task is to poll my husband and four kids on whether we will go out Saturday evening or Sunday. Our weekend family routine involves going to mass, eating out and watching a movie, in any order. Now that I am doing yoga, I have squeezed that into my Saturday morning, too.”

These weekend travels, she is quick to point out, are not for the sake of doing things together, it is about “maximizing learning experiences.”

It is a modest life, with time and care. Dagdag said the only part of their family setting that she is willing to spend and invest in is in the education of her children. “My husband and I believe that providing our children with a good education is an important way to prepare them for their future so we’ve prioritized that above all else… as a result, we don’t have many extravagances, but that’s okay because we prefer to invest in our kids’ future.”

Dagdag grew up with strong relationships and these are the positive family ties. In her words, she has been blessed with constantly having great people around her.

“Looking back, I think the people who have influenced me the most were my parents, my husband, my school teachers, my bosses, work colleagues, friends and my children. I have learned and tried to emulate the best of traits from them, such as empathy and tolerance from my father; patience and money smarts from my mother; perseverance and street smarts from my husband; work habits and working smart from my bosses; accepting and adapting to various personalities from my colleagues and friends; and love without limit from my children,” said Dagdag.

From her dad especially, she has learned to look closely at what makes people thick, what kind of life made them and most are vastly different from hers. A father-to-daughter trait she inherited is of being able to put herself in another’s life and see what he/she sees.

“One of the values instilled by my father is to avoid judging anyone. I seldom get very mad with people, and always try to see situations from another person’s shoes. Generally, I always try to provide factual observations without any judgment,” she said.

‘The toughest part of the job is striking the appropriate balance.’