BlackRock, Inc. (BLK) Earnings Call Transcript & Summary

Hello, everyone, and welcome to today's webinar. My name is Kamal. I'm a Business Transformation Manager with S&P Global Market Intelligence, And I'm responsible for the implementation and strategy for our security services and other associated digital platforms. I'm pleased to moderate and speak at today's webinar, the move to T+1, a focus on the asset servicing impact of a shorter settlement cycle. We know a lot of you are interested in getting right into it. But before we do, a few reminder. I want to ensure that this will be an interactive session. Obviously, we are not going to be in person with you, but the more interactive we can be, the better this is going to be. And of course, to do that, we're going to need your questions. So what I'd like you to do is, if you see the Q&A button at the bottom of your screen, go ahead and hit that and submit your questions for us. We are going to be the only ones that see these questions. Also, make sure you look at the different icons on the bottom of your screen. One of those is the related content which includes linked to our thought leadership resources. And it also includes the survey results on T+1, blocks related to T+1, focusing on asset servicing impacts and how S&P Global Market Intelligence products can help you smooth in your journey towards T+1. A link to our product page for you to learn more about it. You will also find a webinar replay portal to access this and other webinars on demand. This webinar also provides closed captioning in English. Please click on the CC icon in the media player to activate it. If you'd like to schedule a private meeting with one of our product specialists chat with us by clicking on the icon at the bottom of your screen. So if you're interested in what we are talking about today and want to learn more hit the button to schedule this call. Last but not the least, a survey will appear at the end of this session. It will take less than a minute for complete, and it does really help us to understand what you like, what you don't like and what you would like us to cover going forward? Please note that the activities of S&P Global Market Intelligence are independent and separate from S&P Global Ratings. Thank you for joining us. Now I would like to introduce you to our esteemed panelists. We have Thomas Price, Managing Director, technology, operations and business continuity, SIFMA; Chris Thiebaut, Director, U.S. Head of Corporate Actions, BlackRock; John Oleon, Managing Director of Clearing and Settlement Operations, Clear Street. I think we can get started. T+1, this has been discussed in numerous panels, and I still personally think we've scratched only the tip of the iceberg. There is more lying down -- deep down for us to analyze and understand. Of course, the settlement cycle is definitely getting shorter, but note, it is going to be a longer days for the settlement team irrespective of the time zone where they are working from. Based on the survey report, which you can see in the related content icon. It is clear that beyond settlement, most of the concern is in the asset servicing area. And why not? Because asset servicing is becoming more and more complex in an ever-changing investment and regulatory landscape. The account service is required to have a deep expertise, tightly couple systems, which can perform without much manual invention, and innovative technology to solve day-to-day problems and to meet the demands of the customer. This is going to be significantly challenged in a T+1 environment. Now I'll just stop here and open the space for the panelist. And we have broken down this into a few topics, which you can see in the slide. The first, we just wanted to give a small introduction and what is this shorter settlement cycle, the curious case behind it. So maybe I would just come up with -- ask Tom or John to give a short summary why is everyone is crumbling towards getting towards that shorten cycle? And what are the benefits they are going to bring? Is the risk out play the benefits? Or is it a pill hard to digest.

Tom, do you want to go first?

Yes, let me go first. I hope you can hear me okay. Okay. Super. So I think the notion that folks are scrambling. I wouldn't quite characterize it as that quite. The industry has been driving towards T+1 since 1995, when we went from T+3, 5 to T+3. And then in 2017, again, we changed the settlement cycle from T+3 to T+2. So the industry, just to be clear on this, has been trying to get to T+1 since 1995. And in May of 2024, the U.S. and Canada and Mexico are planned to move to T+1. So in fact, it's been 29 years. So again, it's not only the U.S. but the U.K. even India also in various different parts in the transition and we'll talk about that in a second. But why, right? Really, risk is where we at time. So if you shrink the time between trade date and settlement date, you reduce counterparty risk. And that's part of the goal here. In addition to reducing the counterparty risk and risk in the system, we gain operational efficiencies. The goal is to automate less manual processing, less sales and the like. And then in addition to that, you lower the amount of margin percent we need to post the CSG and we could better experience for investors. So let's briefly talk about the current landscape and that there should be no ambiguity that this is a law. So on February 15 -- or rule. On February 15, the SEC approved the final rule mandating T+1 settlement for certain securities in the U.S. and the transition data, as I said earlier, is Tuesday, May 28th of 2022. And that's over the Memorial Day weekend, which is next spring. That's exactly 354 days from today. So we have less than a year to do this. In addition, Canada has stated that they will transition one day earlier than the U.S., which is that Monday, May 27. So there's 353 days for us -- for the Canadian marketplace. A couple of highlights of the rules, and I think this is important. Insurance products are exempt from the rule, security-based swaps and now codify to be exempt from any changes going forward in the settlement rule under 15c6-1. Also, new offerings priced at the 4:30 eastern standard time will now settle on T+2 and keep to complying with the new rule is a requirement that trades need to be allocated, confirmed and affirmed on trade date, and that's fundamental to this whole conversation because as part of the requirements to meet the allocation of that information time line is meeting the same-day affirmation requirements, and that's what the commission is pushing for. And what the industry has done is establish special practices to allocate trades by 7:00 p.m and a firm trades by 9:00 p.m., and that is to get trade ready to enter the DTCC night cycle by 9:30 p.m. And in order to meet those requirements, broker-dealers have some optionality here, which we petitioned to commission on, which is either to enter into written agreements with each one of their customers will develop policies and procedures to monitor customer activity to ensure that they are meeting the allocation and affirmation requirements as covered in the new rule 15c6-2. In addition to the rule that the broker dealers need to enter into these either agreements or policies and procedures, investment advisers under the 40 Act need to be able to allocate and a firm trades on trade date under 15c6-2 and then also make record of that in time stamps and keep part of their -- as a normal course of business that record keeping. And then a final aspect of the rule is 17Ad-27, which is requiring the central matching service providers to maintain an implement and enforce policies and procedures designed to facilitate straight through processing, right, less manual intervention and CFPs need to submit a report to the SEC on a yearly basis, showing their plan and progress towards straight-through processing. In addition to the SEC rule, the MSRB as it relates to municipal securities has put out a proposal to change the settlement cycle for municipal securities to T+1 as well, and they plan to have that coincide with the transition to T+1 as it relates to the SEC rule. So just to be clear on the products that are in scope for T+1, common stocks, preferred stocks, ADRs, ETFs, corporate bonds, meeting funds, UITs and the like. So just realistically, this is a rule. This is an SEC rule. It's not optional. And the industry, we've been working a number of years to get us here. Just I'd like to -- before I turn it over to my colleagues here, just to kind of give you a state of where we are. As I suggested from some of the other jurisdictions, Canada has publicly stated that they're going to move and plan is ongoing on that Monday, May 27. In addition, in the U.K., HM Treasury has formed a task force to study the case to move to T+1. And that task force is in the midst of developing a report and they expect to have that report released by the end of the year. So they have formed 6 different working groups, sort of like what we have done in the U.S. to address things like inventory management, securities lending, treasury management, FX, allocation process, settlement deadlines, corporate actions and EU aluminum. The EU separate from the U.K. is also studying the possibility of moving their settlement cycle to T+1, recognizing that's a bit more challenging. They have 24-plus CSDs. So I think that makes it a little bit more challenging. And India has been on this glide path to T+1. They rolled out their first tranche of stocks at securities in February of 2022. In March of 2022, they took their next tranche of securities and they're on a fast track to bring all of their securities -- equity securities on the T+1 framework. In addition, Mexico, as I suggested, has indicated their willingness to move an alignment with the U.S. We haven't seen anything publicly on that. But that kind of gives you at least an overview of the landscape as it relates to where we are, it's a rule, there's a date and we need to comply by May 28th of 2024. Thank you.

That's some -- sorry, John, please go ahead.

So just a few comments from my point of view as well. I think having gone through the 5 to 3 and 3 to 2, I think a lot of that was tweaking back office, middle office and training systems to get them to move those dates. And I'm not sure that there was a tremendous amount of investment in true back-office technology, including things like corporate actions and affirmation to trades and some of the things Tom talked about in just getting those trades all done before you go home basically at the end of the day. My firm, in particular, has decided to build their stack from scratch just to kind of address those type of problems. We are real time, very short path cycle. And it certainly allows us to be in this space with T+1 and maybe some days T+0, right, to really get those trades affirmed. Even today, we tend not to go home with any P&S breaks, we like to have our trades affirm. We do reach out to our customers. We are already preparing for what will happen next year. I think some other firms that have been around for quite a while, and I've worked for them, right? They -- at least on the back office side and some of the middle office side, there is a smaller amount of investment because they're not revenue driving, right? At the end of the day, the first thing that a CEO or a President or a business leader says this, I need to create more revenue, right? I need to make sure that we're taking on more clients, more products, those type of things. I think -- the good news about T+1 being pushed and the rule being there, and SIFMA and the depositors and all the brokerage community getting behind it is, I think now you'll see a lot more of that investment, right? We see that there are either firms popping up or existing firms that realize that this is quite impactful from P&S to settlements to corporate actions. And if we don't put the investment and you cannot -- if you're doing a lot of activity you cannot hire to cover all of that. There will be errors that will cost you more than if you just invested in the technology itself. So I think that's what happened in the past. We brought in consultants. We hired a little more. We tweaked our systems. I think this move is really going to require quite an investment into back and middle to make sure that they can process not only the volume but the time frames that Tom outlined because if you're not done on day 1, which is trade date, you're going to have a lot of problems. I think we all know that things like P&S breaks, settlement fails that are unmatched. Those lead to what we're going to talk about later, which are corporate actions and dividend issues, that come all the way back, right? So you're just settling one trade can close an hour less for someone on the back end is really what we need to be focused on. We need to get our clients to understand. We need to affirm trade, settle them, get everything compared from the other brokers on the street, much like the option process works for T+1 today, right? It's a fairly clean process for most of us. Because there is that, let's get it all done today, so we don't have to worry about it tomorrow. So I think that, that's going to be the big thing here. I'll also say, the other good thing about T+1 coming is, I think everything will align for funding, bar, NSAC deposit, those type of things. So those firms that trade options versus equity and there is a day break there. Sometimes we have to put up more collateral with depositories. We have funding differences. Now we're bringing in things like munis, treasuries were already there. Options were there. And now if you bring the equity settlement cycle in there, it's a little bit less of a lift for our treasury groups and our firm funding groups to take a look at that. They can look at it as one kind of universe and actually trade around strategies that require less funding. So I think that's there as well. And I'll leave my comments there.

John, that's a very valid statement. Just to picking up from the point where you left. Tightly couple systems, seamless communication, STP. Those are the key and automation. That's the key if we really, really want to achieve efficiency from this T+1. So yes, on that note, then I will bring in, Chris. Because he is our corporate action experts. So Chris, now coming to the second topic, impacts on asset servicing. What are all the issues? People are just talking that there is going to be an issue in corporate action. But maybe you can analyze and tell the audience what are the things that they are going to see when this sort of settlement cycle kicks in.

Issues in corporate actions, never.

That's a good way to start.

Losing a day in the settlement cycle is really going to have significant impacts on asset servicing. We all understand what's going to happen with the x date. But really, it's that knock-on effect or the knock on impacts that really are going to impact all of our processing. We'll touch on a couple of them, holdings management reconciliation. So similar to what John was saying, if there's a settlement break, that certainly creates challenges downstream for the corporate actions. After T+1, firms are really going to need to prioritize reconciling trade obligations, lending settlement, consider a voluntary corporate action for a second. We want to allow clients or to ensure the clients can still participate in an event while trading on expiration date the time frame for reconciling the files, submitting instruction and covering those protects is now much more abbreviated. It's no longer a full day that we have to reconcile all of our instructions and liabilities before those shares need to be delivered out to the market. Cover protects liabilities, although -- and I think we'll talk about this a little bit later, there's really no rule that specifically defines a guaranteed delivery period. It's anticipated that the cover protect date expiration when we move to T+1 will change from expiration date plus 2 that we see today to expiration date plus 1. This means firms are going to need to send and accept final liabilities on events that day after expiration. Again, significantly reducing any time that we have to react if there's a discrepancy between obligations or even a disagreement on the liability between counterparties, deadlines. So outside of just the impact on the communication of liabilities. There's other deadlines that are also changing in the market or in the industry as a result of T+1, and we need to account for those. CNS, for example, their system is going to open up now from 9:45 p.m. to 10:45 on the day before cover protect expiration to allow firms to submit instructions or reliability instructions. If you have clients trading on expiration date and those trades need to be reconciled and instructions prepared and sent to CNS that same night on trade date. Any firm that's using a batch process is certainly going to run into challenges meeting these new cutoffs. We look at corporate action data with a shorter settlement cycle, consumption of corporate action data is going to be critical. Automation here is really key to increase that STP to allow us to meet these challenges. As an investment manager, I need a system heading message. I need systematic messaging about corporate action details to come from the issuer to the depository to my custodians and ultimately feed into my system with little or no delay. It just is important when I send instructions out, I need that to be as little manual touch or manual intervention or delays from either depository, this is where technology or potentially a vendor can really come in and help to create or help to automate or streamline that gold copy creation in your system. Look at some other considerations, claim tracking, obligation. Let's say, you're that firm that already has the perfect reconciliation system real-time settlement, accurate of trades, lending and settlement. You still need to be able to do allocate and reconcile corporate action entitlements that occur. Think about a client that is looking to trade on effective data of a spin-off, you now only have a single day for that corporate action to allocate a DTC for you to reconcile that allocation and have that position available to make delivery the following day with the same challenges with claims, reconciling the claim with the counterparty and settlement to that claim needs to now occur -- and occur in time to be able to make delivery in a T+1 market, which is, in essence, the following day, the next day. Delays in this process are either going to increase fails or potentially you strict trading for your clients or your portfolio managers until the obligations have been settled. Thus you're going to put them at risk of not being able to trade and the market actually moves against them. One final impact that kind of overlooked sometimes, and I want to make sure we bring up is dividend reinvestment and the dividend reinvestment programs we see. Many firms today have in-house programs, allowing clients to reinvest dividend income as it comes in. Typically, these are done systematically through trades and that trading happens so that the -- or often the trades happen so that they settle at the same time that, that income is received into the firm. These programs, these processes, these systems really need to be carefully reviewed and updated to make sure we're ready for T+1.

And I'm going to -- because we have touched upon almost all the points. Now I can -- I think I can ask one more complex question that is the in-flight events. So what's going to happen if there is an event and the critical date falls on or around the conversion date, for example, if there is a dividend with the record date as 29th of May or a voluntary even expiring on either Friday before or the Tuesday after what is that -- is going to happen if we can just help our audience?

Yes. So Yes. When the industry moved from T+3 to T+2, we carefully monitor corporate action events around that conversion date. And SIFMA Corporate Actions Forum, we were able to provide guidance to issuers, depositories and brokers where needed. The industry, we're really going to take a similar approach as we move to T+1. Now whether or not, the issuers and the agents are able to suppress or delay corporate action events around that conversion date really remains to be seen. But regardless, I think it's important that we carefully consider how we're going to handle these events should we have some of them that come up. First, vendors and exchanges are really going to be critical here to ensure that we get accurate announcement and consumption of the updated x dates for these in-flight events. Firms who book entitlements on next day, such as BlackRock, we need to make sure that our system is correctly consuming this information, right, for that dual settlement day and ensuring that we are capturing all of the trades that are eligible or are need to be impacted by a corporate action. Similarly, if your firm process is based on settlement date looking at the record date, just going to be -- it's just isn't critical to ensure that you're correctly capturing that accurate entitle position for processing. That said, and now look a little more complicated. Look at the dual settlement that we're going to see on May 29th and what that would potentially have from an impact of a voluntary event. Let's say we have an event with a cover protect expiring on Tuesday. That means we potentially need -- we need to segregate out obligations, right? Everything is going to settle on that Tuesday, but we need to segregate out trades and obligations that are eligible for the event versus trades that were executed T+1 and potentially aren't eligible for the event. It means we need to go in and prioritize or we may need to prioritize deliveries to ensure that they're only delivering off shares or sending out liabilities using positions that were actually eligible to participate in the corporate action. I talked a little bit ago about the lack of really industry rules that drive the calculation of guaranteed delivery period. When we move to T+2, we saw a handful of events that were announced post T+2 with a 3D Protect period. right? It's often -- what would happen is if we found out that the issuers or the agents were pulling potentially offer documents or reusing offer documents or it got extended a couple of times and went over that conversion window. What happened or what happens is that runs into -- you can run into a challenge, right? You potentially then have a scenario where you can execute a trade post expiration and yet still have that trade settled in time to deliver for the cover protect. Hopefully, communication here is key. The industry, SIFMA has been partnering, the Corporate Action Forum is working with issuers, agents to really ensure that cover protect period is updated in line with shortened settlement but it's going to be key or critical to understand when these events occur and being able to really look and scrutinize the obligations to ensure that you're not using shares or you're not sending out liabilities on positions that aren't eligible for the event simply because they settle in time for the cover protect period.

Exactly. And another point in the in-flight events is that -- of course, you touched upon the key point where vendors has -- or the CSD or the custodians have a very important responsibility to give the right x and the right record. And once we get it, it is also important deposition systems give us the right positions when there is a change of date. If there is any system, if their firms running with the hard-coded value, hard-coded systems and where there is completely no interaction, then it is going to become very, very tough, and that's the point that you've highlighted, Chris. So thanks to that. And on that note, we can start with our first polling questions. It will be really helpful if you can just look into it and then give us your view.

So the question that we want to do is like what is the most impacted areas on the asset servicing due to the shorter settlement cycle. Is it -- which area are you seeing the most impact? Is it corporate action data, holdings management and claims tracking or is it under voluntary election deadlines, liabilities and protect or within tubal redemption? Kindly let us know why do you think from firm the high level of impact would be? And while we are waiting for the audience to give there vote, I can maybe check with Chris again. Now we know and we have discussed on all the key issues. We know that these are the issues maybe people who are like still thinking that, okay, it's x and record is going to be the same. We are fine with it, somebody will handle it, but that's not going to be the case now, and you have brought out all the issues there. Now if I can ask that. How is that -- yes, we can see that as it has mentioned, data and holdings are on the higher level there. So that justifies what we are talking about, the key areas. So now I can maybe ask Chris, what should the firms be doing? Like how these can be addressed anything on the data, anything on cover protect or anything on tubal redemption, if you've anything..

Absolutely and looking at holdings, reconciliation, that's key. That's where I think some of the biggest challenges potentially could come up. Some solutions really to address these. I think I kind of put it into 3 buckets. First, technology. You got to closely review your -- what you have in your firm's technology and where can you increase STP? Where can you eliminate the exceptions that you're seeing. Reconciliation works much better. If you pay it right or you allocate it correctly the first time or the batch processes. John touched on this. I touched on this. If you have a batch process in place today in a T+1 market, and there's actions you need to take on those trades -- on trade date, batch processes are going to certainly create some challenges. Looking at your vendor from a technology perspective. Is the vendor is going to provide you the information you need? And are you able to consume that and eliminate exceptions as you're doing that. And then again, looking at your internal reconciliation process, really throughout the entire life cycle and where can that be automated, where can you streamline that. Point two, resources. I touched on, right, there's some of these deadlines are much later in the day. What do you need to do to address those? Do you have a follow the sun model. Is it possible to take some of this to better utilize -- that model to pass some of this processing off? Or does the entire process need to be moved to another location. You think about CNS liabilities again, it's certainly going to be difficult for an operations individual on the East Coast to be entering liabilities at 10:00 p.m. on trade date just to meet this cutoff. Is there an opportunity here to have some of this processing move to maybe a processing center in the West Coast? Or maybe this is something that an APAC or is your APAC team or somebody in APAC can pick up and facilitate on your behalf. Finally, the third point, right, we talked about technology and going to have some resource issues, but a lot of this really comes down to just process and procedure changes SIFMA and the Corporate Actions Forum has been doing a lot of work on industry best practices, really around liabilities. Today, for example, many firms send and one of the best practices talks about sending a potential liability. So starting that liability process 24 hours before the expiration date. That worked fine in T+2. But 24 hours before the expiration date in T+1 is on trade date. And if it's an earlier expiration, it's potentially on trade date before that trade is executed, not something that's going to be feasible. It means we really need to ensure from an industry that we have a very robust process to communicate with each other on these liabilities and really relook and refine some of these best practices. Ultimately, it's communication and a process flow that allows us to seamlessly and quickly navigate liabilities same day in a matter of hours.

Yes. And those 2 points, if they have still people working and then looking and the periods and then typing the corporate action manually, they are still going to have a problem. And if they don't augment their staff and they follow the model -- sun model, if they don't pick it up, which means that someone is working at 2 a.m. and then solving their settlement problems, which is -- which should not be the case. So in -- so then I think we can move on to the next poll question that -- if we can just move on to the next poll question, what we want to ask is that considering these issues, what are the best way that you can tackle the asset servicing impact in the shorter settlement cycle? Do you feel that outsourcing of the corporate action operations data and the scrubbing would be a better option or relocation of resources or adopt -- follow the sun model or if you think that anything in the creating or changing the industry was as you can see that it is expected that there would be some change in industry best practices. So I guess -- we hope. And then I think it is already happening, if you're not aware of it. So that's a good discussion. So then I would move on to the next topic that we have. Tom and John, maybe I'll just jump on you guys. Automation is what we were talking about. What we often seen is that asset servicing in this area, automation has been kind of ignored and is being treated as cost center. I mean like we've valid reasons, but still, like if you have anything that you want to add on to it, what is the importance of automation? And what is going to be the impact if nothing is being done, if no preparation is done?

Yes. Yes. So I think from my perspective, we look at automation across the board with all of my departments pretty much on a regular basis. We are looking to invest the time to create efficiencies within our groups. We're not a large firm, even though we do clear a lot of business. And what we don't want to do is get into the habit of constantly filling gaps in our platform with people, right, hiring many, many people to cover for a particular process. I think there's a lot of downside to that and one turnover, right, and people moving and having to retrain, people make errors, and they're not as consistent as others. It's much -- it's a much better design to have humans kind of look at the exceptions that could come out on a limited basis and speak to customers, trading desks, data provider, those type of things than it is for them to look at a massive amount of processing and hopefully come up with the 1 or 2 items that they need to fix to move forward. When I first got in this business, we hired like it was going out of style in the '80s and '90s. I think we did do some investment in the late '90s and into 2000s, particularly with the shorter time frame that coming up I think we took a little gap for a while, and I'm sure everybody continuously looks at their processes, but I'm not sure they were some of those major investments that needed to occur. I think, this is something that's going to push out the whole street to really things like a golden copy, right, to make sure that the data is right, which is where everything starts. If you get that right, and then, of course, what I spoke about before, you're clearing and your settlement group could be accurate and reconciled. Then the corporate action or asset servicing as a whole, whether it's tax, whether it's liability processing, voluntaries, that information, that's either going out to clients or that individual is looking at is accurate, and they'll be able to action those in some of these time frames, which are much more condensed. I think if you don't go that route and you just like I said before, try to throw bodies at it, you're going to have a problem. The last point I'll make is going into that weekend, we need to be exceptionally clean going into that weekend. That will take a very large burden off of everybody going into this. If you walk into Friday with OCC breaks and settlement issues and non affirmed trades and a couple of open liabilities that you've been chasing for quite a long time. And then obviously, as Chris mentioned, some recon differences, you'll be scrambling from that Tuesday, you'll probably be on Monday looking at Tuesday to try to clean up some of what's there. So I think it's imperative that you begin to look now on what you're going to do those weeks before to keep yourself as clean as possible, much like you would do if you did a very large system conversion. And make sure that you're clean going in because that will reduce a lot of the noise that you're getting because there will be things that we haven't thought about or little nuances probably that we haven't thought about that you're going to have to react to and take care of. You want to have that then what to do that and not be, "Oh my god, I'm not even sure I'm in balance with DTC right now, and I've got this big deal going off and having all your concentration going there. So very imperative that you put the expertise and you talk to your trading and your clients. If you have a client that's not affirming trades a lot on a day-to-day basis, have that conversation prior to this, right? If you have overseas clients, have conversations with them prior to this because they're really impacted by this the most, right? If they're using -- if they're in the far east and they're using a custodian, and they have to do their affirmations, that's very late their time as well and they aid to get all that data down to you so that everything is allocated and in place for trade day plus 1 and then again, that take the asset servicing team to what they need to do at that point. So yes, I do agree that maybe we follow this on or we have people working later or the ship management on the U.S. side, for what we're doing on the later cycles now that we have to do, but there's also some things that need -- on the overseas counterparties that they will have to do that will greatly impact their staffing. And maybe follow the sun, we'll be moving some of that around, but there are some firms that are only based in those regions, and they will have to have people either stay late, get in early, do things that probably international people have done for quite a while are now kind of affected in the U.S. market as well.

Yes, John. So treated like a new project, treated like new system implementation, assign resource, allocate people. So it will be -- so everyone is actually looking into it. That's a valid point, John.