Depository Trust & Clearing Corporation: Difference between revisions

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{{Short description|American financial services company}}
{{Citation style|details=For the citations using bare URLs placed within the article, they should be placed in <nowiki><ref></nowiki> tags.|date=October 2011}}
{{More citations needed|date=October 2012}}
{{use mdy dates |date=July 2022}}
{{Infobox company
{{Infobox company
| name = Depository Trust & Clearing Corporation
| name = Depository Trust & Clearing Corporation
| logo =[[Image:The Depository Trust & Clearing Corporation logo.svg|200px]]
| logo = Depository Trust & Clearing Corporation logo.svg
| type = [[Private company|Private]]
| type = [[Private company|Private]]
| genre = [[Holding company]]
| genre = [[Holding company]]
| foundation = DTCC (1999) - holding company for DTC (1973) and NSCC (1976)
| foundation = DTCC (1999) – holding company for DTC (1973) and NSCC (1976)
| founder =
| founder =
| location_city = [[New York City]]
| location_city = 570 Washington Blvd<br />[[Jersey City, NJ]]
| location_country = [[United States|U.S.]]
| location_country = U.S.
| location =
| location =
| locations = 10
| locations = 10
| area_served =
| area_served =
| key_people = Robert Druskin, Executive Chairman, <br /> Michael C. Bodson, President & CEO <br /> | industry = [[Finance]]
| key_people = Kevin Kessinger, Non-executive Chairman<br />Frank La Salla, President and CEO<br />
| industry = [[Finance]]
| products =
| products =
| services = financial
| services = Financial
| revenue = {{decrease}} [[United States dollar|US$]]960,249,000 (2009)
| revenue = [[United States dollar|US$]]1,784,368,000 (2018)<ref name="dtcc.com">http://www.dtcc.com/~/media/Files/Downloads/legal/financials/2019/DTCC-Annual-Financial-Statements-2018-and-2017.pdf {{Bare URL PDF|date=March 2022}}</ref>
| operating_income =
| operating_income =
| net_income = {{decrease}} US$ 104,774,000 (2009)
| net_income = US$299,713,000 (2018)<ref name="dtcc.com"/>
| assets = US$37,719,148,000
| assets = US$46,971,101,000 (2018)<ref name="dtcc.com"/>
| equity = US $501,326,000
| equity = US$2,332,235,000 (2018)<ref name="dtcc.com"/>
| owner = banks, brokers
| owner = Banks, brokers
| num_employees = 4,300<ref>{{Cite web|url=https://www.dtcc.com/news/2018/july/16/dtcc-named-to-the-forbes-best-employers-list|title=DTCC Named to the Forbes Best Employers List &#124; DTCC|website=www.dtcc.com}}</ref>
| num_employees =
| parent =
| parent =
| divisions =
| divisions =
| subsid = NSCC<br>DTC<br>FICC<br>DTCC Deriv/SERV LLC<br>DTCC Solutions LLC<br>EuroCCP Ltd.<br>DTCC Loan/SERV LLC<br>Avox<br>Warehouse Trust Company LLC<br>DTCC Derivatives Repository Ltd.
| subsid = NSCC<br />[[Depository Trust Corporation|DTC]]<br />FICC<br />DTCC Deriv/SERV LLC<br />DTCC Solutions LLC<br />EuroCCP Ltd.<br />DTCC Loan/SERV LLC<br />Warehouse Trust Company LLC<br />DTCC Derivatives Repository Ltd.
| slogan =
| slogan =
| homepage = [http://www.dtcc.com/ www.dtcc.com]
| website = {{URL|https://www.dtcc.com/}}
| footnotes =
| footnotes =
| intl =
| intl =
}}
}}
'''The Depository Trust & Clearing Corporation''' (DTCC), headquartered at 55 Water Street in [[New York City]], is the world’s largest post-trade [[financial services]] company. DTCC was established in 1999 as a holding company to combine The Depository Trust Company (DTC) and National Securities Clearing Corporation (NSCC). It was set up to provide an efficient and safe way for buyers and sellers of [[security (finance)|securities]] to make their exchange, and thus "[[clearing (financial)|clear]] and [[settlement (finance)|settle]]" transactions. It also provides [[Central Securities Depository|central custody of securities]].
The '''Depository Trust & Clearing Corporation''' ('''DTCC''') is an American [[financial market infrastructure]] company that provides [[clearing (financial)|clearing]], [[settlement (finance)|settlement]] and [[Trade Repository|trade reporting]] services to [[financial market]] participants. It performs the exchange of [[security (finance)|securities]] on behalf of buyers and sellers and functions as a [[central securities depository]] by providing central custody of securities.


User-owned [http://www.forbes.com/tools/glossary/search.jhtml?term=depository_trust_company] and directed, it automates, centralizes, standardizes, and streamlines processes that are critical to the safety and soundness of the world’s [[capital market]]s. Through its subsidiaries, DTCC provides clearance, settlement, and information services for equities, corporate and municipal [[Bond (finance)|bonds]], [[unit investment trust]]s, government and [[mortgage-backed security|mortgage-backed]] securities, [[money market]] instruments, and over-the-counter [[Derivative (finance)|derivative]]s. It also manages transactions between [[mutual fund]]s and [[insurance]] carriers and their respective investors.
DTCC was established in 1999 as a holding company to combine [https://www.dtcc.com/about/businesses-and-subsidiaries/dtc The Depository Trust Company (DTC)] and National Securities Clearing Corporation (NSCC). User-owned and directed, it automates, centralizes, standardizes, and streamlines processes in the [[capital market]]s.<ref>{{cite web|title=Depository Trust Company – DTC|url=http://www.investopedia.com/terms/d/dtc.asp|website=Investopedia|access-date=18 March 2015}}</ref> Through its subsidiaries, DTCC provides clearance, settlement, and information services for equities, corporate and municipal [[Bond (finance)|bonds]], [[unit investment trust]]s, government and [[mortgage-backed security|mortgage-backed]] securities, [[money market]] instruments, and [[Over-the-counter (finance)|over-the-counter]] [[Derivative (finance)|derivatives]]. It also manages transactions between [[mutual fund]]s and [[insurance]] carriers and their respective investors.


In 2011, DTCC settled the vast majority of securities transactions in the [[United States]] and close to $1.7 [[quadrillion]]<ref>{{cite web |url=http://www.dtcc.com/news/2015/june/30/new-dtcc-data-products-service-to-provide-dynamic-data |title=New DTCC Data Products Service To Provide Dynamic Data Provisioning and Easier Access to DTCC Data |publisher=DTCC |date=2015-06-30 |access-date=2016-04-01 |archive-date=March 5, 2016 |archive-url=https://web.archive.org/web/20160305095058/http://www.dtcc.com/news/2015/june/30/new-dtcc-data-products-service-to-provide-dynamic-data |url-status=dead }}</ref><ref>{{cite web|url=http://www.businesswire.com/news/home/20080325005399/en/DTCC-Settles-Record-1.8-Quadrillion-2007-984 |title=DTCC Settles Record $1.8 Quadrillion in 2007; $984 Million in Rebates Returned to Customers |publisher=[[Business Wire]] |date=2008-03-25 |access-date=2016-04-01}}</ref><ref name="afr.com">{{cite web|url=http://www.afr.com/business/banking-and-finance/quadrillion-dollar-corporation-at-the-heart-of-the-financial-system-20150707-gi6w7b |title=Quadrillion dollar corporation at the heart of the financial system |work=[[Australian Financial Review]] |date=2015-07-07 |access-date=2016-04-01}}</ref> in value worldwide, making it by far the highest financial value processor in the world.<ref name="afr.com" /> DTCC operates facilities in the [[New York metropolitan area]], and at multiple locations in and outside the United States.<ref>{{Cite web |title=The Muse brings you inside the office of DTCC |url=https://www.themuse.com/profiles/dtcc |access-date=2023-03-17 |website=The Muse |language=en}}</ref>
In 2011, DTCC settled the vast majority of securities transactions in the [[United States]], close to $1.7 quadrillion in value. DTCC has operating facilities in the New York metropolitan area, and at multiple locations in and outside the U.S.


== History ==
DTCC, through its subsidiaries, provides clearing, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, money market instruments and over-the-counter derivatives. In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with their distribution networks.
Established in 1973, The Depository Trust Company (DTC) was created to alleviate the rising volumes of [[Red tape|paperwork]] and the lack of security that developed after rapid growth in the volume of transactions in the U.S. securities industry in the late 1960s.<ref>{{cite book|title=The Depository Trust Company: DTC's Formative Years and Creation of The Depository Trust & Clearing Corporation (DTCC) |author=William T. Dentzer Jr. |publisher=YBK Publishers |date=2008}}</ref>


===1960s Wall Street paperwork crisis===
==History==
Before DTC and NSCC were formed, [[brokers]] physically exchanged certificates, employing hundreds of messengers to carry certificates and cheques. The mechanisms brokers used to transfer securities and keep records relied heavily on pen and paper. The exchange of physical [[stock certificate]]s was difficult, inefficient, and increasingly expensive. Before 1946, the SEC had allowed for [[T+2]] settlement (that is, settlement within two days of the trade date), but by the early 1960s, this deadline had been lengthened to four days and then five.<ref name="Morris_Page_4">{{cite book |last1=Morris |first1=Virginia B. |last2=Goldstein |first2=Stuart A. |title=Guide to Clearance & Settlement: An Introduction to DTCC |date=2009 |publisher=Lightbulb Press |location=New York |isbn=9781933569987 |page=4 |url=https://books.google.com/books?id=O86DYQgg6v8C&pg=PA4 |access-date=20 November 2022}}</ref>
Established in 1973, The Depository Trust Company (DTC) was created to alleviate the rising volumes of [[Red tape|paperwork]] and the lack of security that developed after rapid growth in the volume of transactions in the U.S. securities industry in the late 1960s.


In the late 1960s, with an unprecedented surge in trading leading to volumes of nearly 15 million shares a day on the NYSE in April 1968 (as opposed to 5 million a day just three years earlier, which at the time had been considered overwhelming), the paperwork burden became enormous.<ref>{{cite journal|jstor=3116692|title=Certificates and Computers: The Remaking of Wall Street, 1967 to 1971|journal=Business History Review|first=Wyatt|last=Wells|date=1 January 2000|volume=74|issue=2|pages=193–235|doi=10.2307/3116692|s2cid=154737499}}</ref><ref name="google1">{{cite book|url=https://books.google.com/books?id=CZSmnYCETqoC&q=haack+ccs+certificate&pg=PA15 |title=The Unseen Wall Street of 1969–1975: And Its Significance for Today |author = Alec Benn |via=Google Books |access-date=2012-10-31|isbn=978-1-56720-333-2 |year=2000 |publisher=Bloomsbury Academic }}</ref> Stock certificates were left for weeks piled haphazardly on any level surface, including [[filing cabinet]]s and tables. Stocks were mailed to wrong addresses, or not mailed at all. Overtime and night work became mandatory. Turnover was 60% a year.<ref name="libertyparkusafd1">{{Cite web|url=http://www.libertyparkusafd.org/lp/CD-ROMs%5CFree%20Market%20System%20-%2038%20-%20Fleecing%20the%20Lambs.html|title=Liberty Park, USA Foundation|archive-url=https://web.archive.org/web/20081028115919/http://www.libertyparkusafd.org/lp/CD-ROMs%5CFree%20Market%20System%20-%2038%20-%20Fleecing%20the%20Lambs.html|archive-date=2008-10-28}}</ref>
Before DTC and NSCC were formed, [[brokers]] physically exchanged certificates, employing hundreds of messengers to carry certificates and checks. The mechanisms brokers used to transfer securities and keep records relied heavily on pen and paper. The exchange of physical [[stock certificate]]s was difficult, inefficient, and increasingly expensive.


To help brokerage firms catch up on the overwhelming volume of paperwork, the stock exchanges were forced to close every week (they chose every Wednesday), and trading hours were shortened on other days of the week.<ref name="Morris_Page_4" />
In the late 1960s, with an unprecedented surge in trading leading to volumes of nearly 15 million shares a day on the NYSE in April 1968 (as opposed to 5 million a day just three years earlier, which at the time had been considered overwhelming), the paperwork burden became enormous.[http://links.jstor.org/sici?sici=0007-6805(200022)74%3A2%3C193%3ACACTRO%3E2.0.CO%3B2-2][http://books.google.com/books?id=CZSmnYCETqoC&pg=PA15&lpg=PA15&dq=haack+ccs+certificate&source=web&ots=oln2td4tTu&sig=u-CR0cH0UYIVUsIaJbBSsV3T3LQ#PPA14,M1] Stock certificates were left for weeks piled haphazardly on any level surface, including filing cabinets and tables. Stocks were mailed to wrong addresses, or not mailed at all. Overtime and night work became mandatory. Turnover was 60% a year.[http://www.libertyparkusafd.org/lp/CD-ROMs%5CFree%20Market%20System%20-%2038%20-%20Fleecing%20the%20Lambs.html]


===Industry response===
To deal with this large volume, which was overwhelming brokerage firms, the stock exchanges were forced to close every week (they chose every Wednesday), and trading hours were shortened on other days of the week.


The first response was to hold all paper [[stock certificate]]s in one centralized location, and automate the process by keeping electronic records of all certificates and securities clearing and settlement (changes of ownership and other securities transactions).<ref name="Morris_Page_7">{{cite book |last1=Morris |first1=Virginia B. |last2=Goldstein |first2=Stuart A. |title=Guide to Clearance & Settlement: An Introduction to DTCC |date=2009 |publisher=Lightbulb Press |location=New York |isbn=9781933569987 |page=7 |url=https://books.google.com/books?id=O86DYQgg6v8C&pg=PA7 |access-date=20 November 2022}}</ref>
Two methods were used to solve the crisis:


One problem was state laws requiring brokers to deliver certificates to investors. Eventually all the states were convinced that this notion was obsolete and changed their laws. For the most part, investors can still request their certificates, but this has several inconveniences, and most people do not, except for novelty value.
The first was to hold all paper [[stock certificate]]s in one centralized location, and automate the process by keeping electronic records of all certificates and securities clearing and settlement (changes of ownership and other securities transactions). The method was first used in [[Austria]] by the [[Vienna]] [[Giro]] and Depository Association in 1872.[http://publikationen.ub.uni-frankfurt.de/volltexte/2007/4885/pdf/ILF_WP_068.pdf]


This led the [[New York Stock Exchange]] to establish the Central Certificate Service (CCS) in 1968<ref>[https://web.archive.org/web/20081027220404/http://www.time.com/time/magazine/article/0,9171,844480,00.html "Wall Street: Attack on the Snarl"], ''[[Time (magazine)|Time]]'', May 24, 1968.</ref> at 44 Broad Street in New York City.<ref name="libertyparkusafd1" /> Anthony P. Reres was appointed the head of CCS. NYSE President Robert W. Haack promised: "We are going to automate the stock certificate out of business by substituting a punch card. We just can't keep up with the flood of business unless we do".<ref name="autogenerated1">{{cite magazine |url= http://content.time.com/time/magazine/article/0,9171,838048,00.html |title=Wall Street: Speeding It Up |magazine=Time |date=1968-03-15 |access-date=2012-10-31}}</ref> The CCS transferred securities electronically, eliminating their physical handling for settlement purposes, and kept track of the total number of shares held by NYSE members.<ref>{{cite web |url= https://www.nyse.com/about/history/timeline_technology.html |title= About Us > History > Timeline > Timeline 1930 "Black Box" Ticker |publisher= New York Stock Exchange |date= March 15, 1968 |access-date= 2017-08-26 |archive-url= https://web.archive.org/web/20150508074113/http://www1.nyse.com/about/history/timeline_technology.html |archive-date= 2015-05-08 |url-status= dead }}</ref> This relieved brokerage firms of the work of inspecting, counting, and storing certificates. Haack labeled it "top priority", $5 million was spent on it,<ref>{{cite web|url = http://archive.computerhistory.org/resources/text/Computer_Usage_Company/070910_download/computerusagecompany.computers_and_stock_1968/computerusagecompany.computers_and_stock_1968.pdf |title=Computer Usage – Fall Issue 1968 |website = computerhistroy.org |access-date=2012-10-31}}</ref> and its goal was to eliminate up to 75% of the physical handling of stock certificates traded between brokers.<ref name="autogenerated1" /> One problem, however, was that it was voluntary, and brokers responsible for two-thirds of all trades refused to use it.<ref name="google1" />
One problem was state laws requiring brokers to deliver certificates to investors. Eventually all the states were convinced that this notion is obsolete and changed their laws. For the most part, investors can still request their certificates, but this has several inconveniences, and most people do not, except for novelty value.


By January 1969, it was transferring 10,000 shares per day, and plans were made for it to be handling broker-to-broker transactions in 1,300 issues by March 1969.<ref>{{cite web|url=http://www.sechistorical.org/collection/papers/1960/1969_0122_HaackInvestor.pdf |title =Remarks of Robert W. Haack: President of the New York Stock Exchange – 1969 |publisher=Securities and Exchange Commission Historical Society |access-date=2012-10-31}}</ref> In 1970 the CCS service was extended to the [[American Stock Exchange]].<ref>{{cite magazine|url=http://www.time.com/time/magazine/article/0,9171,909411-2,00.html |archive-url=https://web.archive.org/web/20090114075126/http://www.time.com/time/magazine/article/0,9171,909411-2,00.html |url-status=dead |archive-date=January 14, 2009 |title=Business: A Bear Market for Brokers |magazine=Time |date=1970-06-15 |access-date=2012-10-31}}</ref> This led to the development of the Banking and Securities Industry Committee (BASIC), which represented leading U.S. banks and securities exchanges,<ref name="uni-frankfurt2007">{{cite web |title=Institute of Law |url=http://publikationen.ub.uni-frankfurt.de/volltexte/2007/4885/pdf/ILF_WP_068.pdf |access-date=2012-10-31 |website=Publikationen.ub.uni-frankfurt.de}}</ref> and was headed by a banker named Herman Beavis, and finally the development of DTC in 1973,<ref>{{cite web|url=http://www.anthro.uci.edu/faculty_bios/maurer/Maurer-PubCult.htm |archive-url=https://archive.today/20070816070232/http://www.anthro.uci.edu/faculty_bios/maurer/Maurer-PubCult.htm |url-status=dead |archive-date=2007-08-16 |title=Bill Maurer – Forget Locke?: From Proprietor to Risk-Bearer in New Logics of Finance – Public Culture 11:2 |access-date=2017-03-11}}</ref> which was headed by William (Bill) T. Dentzer Jr., a former US [[intelligence community]] member and [[New York State Department of Financial Services|New York State Banking Superintendent]].<ref>{{cite web|website=Medium |url=https://susan-g-dentzer.medium.com/the-greatest-father-from-a-great-generation-f9ceb3758066 |author=Susan Dentzer |title=The Greatest Father from a Great Generation |date=28 August 2019}}</ref><ref>{{Cite web|url=http://www.sechistorical.org/collection/oralHistories/interviews/calvin/calvin061307Transcript.pdf|archive-url=https://web.archive.org/web/20081121024507/http://www.sechistorical.org/collection/oralHistories/interviews/calvin/calvin061307Transcript.pdf|url-status=dead|archive-date=November 21, 2008|date=November 21, 2008|title=Securities and Exchange Commission Historical Society Interview with Donald Calvin}}</ref> All the top New York banks were represented on the board, usually by their chairman. BASIC and the SEC saw this indirect holding system as a "temporary measure", on the way to a "certificateless society".<ref name="uni-frankfurt2007" />
This led the [[New York Stock Exchange]] to establish the Central Certificate Service (CCS) in 1968<ref>[http://www.time.com/time/magazine/article/0,9171,844480,00.html Time magazine, ''Wall Street: Attack on the Snarl'', May 24, 1968] Accessed 20 Oct 2009</ref> at 44 Broad Street in New York City.[http://www.libertyparkusafd.org/lp/CD-ROMs%5CFree%20Market%20System%20-%2038%20-%20Fleecing%20the%20Lambs.html] Anthony P. Reres was appointed the head of CCS. New York Stock Exchange President Robert W. Haack promised: "We are going to automate the stock certificate out of business by substituting a punch card. We just can't keep up with the flood of business unless we do."[http://www.time.com/time/magazine/article/0,9171,838048-2,00.html] The CCS transferred securities electronically, eliminating their physical handling for settlement purposes, and kept track of the total number of shares held by NYSE members.[http://www.nyse.com/about/history/timeline_technology.html] This relieved brokerage firms of the work of inspecting, counting, and storing certificates. Haack labeled it "top priority," $5 million was spent on it,[http://archive.computerhistory.org/resources/text/Computer_Usage_Company/070910_download/computerusagecompany.computers_and_stock_1968/computerusagecompany.computers_and_stock_1968.pdf] and its goal was to eliminate up to 75% of the physical handling of stock certificates traded between brokers.[http://www.time.com/time/magazine/article/0,9171,838048-2,00.html] One problem, however, was that it was voluntary, and brokers responsible for 2/3 of all trades refused to use it.[http://books.google.com/books?id=CZSmnYCETqoC&pg=PA15&lpg=PA15&dq=haack+ccs+certificate&source=web&ots=oln2td4tTu&sig=u-CR0cH0UYIVUsIaJbBSsV3T3LQ#PPA14,M1]


Today, all physical shares of paper stock certificates are held by a separate entity, [[Cede and Company]].<ref name="Morris_Page_7" />
By January 1969, it was transferring 10,000 shares per day, and plans were for it to be handling broker-to-broker transactions in 1,300 issues by March 1969.[http://www.sechistorical.org/collection/papers/1960/1969_0122_HaackInvestor.pdf] In 1970 the CCS service was extended to the [[American Stock Exchange]].[http://www.time.com/time/magazine/article/0,9171,909411-2,00.html] This led to the development of the Banking and Securities Industry Committee (BASIC), which represented leading U.S. banks and securities exchanges,[http://publikationen.ub.uni-frankfurt.de/volltexte/2007/4885/pdf/ILF_WP_068.pdf], and was headed by a banker named Herman Beavis, and finally the development of DTC in 1973,[http://www.anthro.uci.edu/faculty_bios/maurer/Maurer-PubCult.htm] which was headed by Bill Dentzer, the former New York State Banking Superintendent.[http://www.sechistorical.org/collection/oralHistories/interviews/calvin/calvin061307Transcript.pdf] All the top New York banks were represented on the board, usually by their chairman. BASIC and the SEC saw this indirect holding system as a "temporary measure," on the way to a "certificateless society."[http://publikationen.ub.uni-frankfurt.de/volltexte/2007/4885/pdf/ILF_WP_068.pdf]


The second method involves ''[[Netting|multilateral netting]]''; and led to the formation of the National Securities Clearing Corporation (NSCC) in 1976.
The second response involves ''[[Netting|multilateral netting]]''; and led to the formation of the National Securities Clearing Corporation (NSCC) in 1976.


===EuroCCP===
In 2010, Robert Druskin was named Executive Chairman of the company, and in July 2012 Michael Bodson was named President and [[Chief Executive Officer]].


European Central Counterparty Limited (EuroCCP) used to be a European subsidiary of DTCC from 2008 to 2020. It provides equities clearing services on a pan-European basis. Headquartered in [[London]], EuroCCP is a UK-incorporated Recognised Clearing House regulated by the UK's [[Financial Services Authority]] (FSA). In December 2019, EuroCCP announced it would be purchased by [[Cboe Global Markets]].<ref>{{cite web|website=Business Insider |url=https://markets.businessinsider.com/news/stocks/cboe-to-buy-european-equities-clearing-house-euroccp-1028749521 |title=Cboe To Buy European Equities Clearing House EuroCCP |date=10 December 2019}}</ref>
In 2008, The [[Clearing Corporation]] and the Depository Trust & Clearing Corporation announced CCorp members will benefit from CCorp's netting and risk management processes, and will leverage the asset servicing capabilities of DTCC's [[Trade Information Warehouse]] for [[credit default swaps]] (CDS). [http://www.clearingcorp.com/press/pressreleases/20080528-dtcc-cds.html][http://www.dtcc.com/products/derivserv/suite/tradeinfo_warehouse.php] [http://www.efinancialnews.com/tradingandtechnology/derivatives/content/2451991530][http://www.hedgefundsreview.com/public/showPage.html?page=818032]


EuroCCP began operations in August 2008, initially clearing for the pan-European trading platform [[Turquoise (trading platform)|Turquoise]]. EuroCCP has subsequently secured appointments from additional trading platforms and now provides central counterparty services for equity trades to Turquoise, SmartPool, NYSE Arca Europe and Pipeline Financial Group Limited. EuroCCP clears trades in more than 6,000 equities issues for these trading venues. In October 2009, EuroCCP began clearing and settling trades made on the Turquoise platform in 120 of the most heavily traded listed Depositary Receipts.{{Citation needed|date=August 2020}}
On Thursday 1 July 2010, it was announced that the DTCC had acquired all of the shares of Avox Limited, based in Wrexham, North Wales. Deutsche Börse had previously held over 76% of the shares.


Citi Global Transaction Services acts as settlement agent for trades cleared by EuroCCP, which now provides clearing services in 15 major national markets in Europe: Austria, Belgium, France, Denmark, Germany, Ireland, Italy, Finland, Netherlands, Norway, Portugal, United Kingdom, Switzerland, Sweden and Spain. Trades are handled in seven different currencies: the Euro, British Pound, U.S. Dollar, Swiss Franc, Danish Krone, Swedish Krona, and Norwegian Krone.<ref>{{cite web |url= http://www.dtcc.com/about/subs/euroccp.php |title= About DTCC – European Central Counterparty Ltd. (EuroCCP) |publisher= DTCC |date= January 6, 2012 |access-date= October 31, 2012 |url-status= dead |archive-url= https://web.archive.org/web/20121029092029/http://dtcc.com/about/subs/euroccp.php |archive-date= October 29, 2012 }}</ref><ref>{{cite web |url=http://euroccp.co.uk/ |title=Welcome to EuroCCP |publisher=European Central Counterparty |access-date= October 31, 2012 |archive-url=https://web.archive.org/web/20120625072732/http://www.euroccp.co.uk/ |archive-date= June 25, 2012 |url-status=dead }}</ref>
==Controversy over naked short selling==
{{Expert-subject |Finance |2=section |reason= Copy edit has been requested, but this section is too technical, uses too much jargon, and is too legally fraught, to be suitable for copy editing by someone without subject expertise|date=September 2012}}
Several companies have sued the DTCC, without success, over delivery failures in their stocks, alleging culpability for [[naked short selling]]. Furthermore, the issue of the DTCC's possible involvement has been taken up by [[United States Senate|Senator]] [[Robert Foster Bennett|Robert Bennett]] and discussed by the NASAA and in articles. disagreed with by DTCC—in the ''[[Wall Street Journal]]'' and ''[[Euromoney Magazine]]''{{what|post-text=awkward sentence structure|date=October 2011}}.<ref>[http://online.wsj.com/public/article/SB118359867562957720- ''[[Wall Street Journal]]'']</ref><ref name=WSJ_July2007>{{cite news|accessdate=
|url=http://online.wsj.com/public/article/SB118359867562957720-5Yb1Y_mpcl9a2nKbc0IaV0tDHyk_20070712.html |title=Blame the 'Stock Vault'?
|author=Emshwiller, John R., and Kara Scannell
|work=[[The Wall Street Journal]]
|date=July 5, 2007}}</ref> The DTCC contends that the suits are orchestrated by a small group of lawyers and executives to make money and draw attention from the companies' problems.<ref name=WSJ_July2007/>


===Later developments===
Critics blame DTCC as being in charge of the system where it happens, say that DTCC turns a blind eye to the problem, and that the [[Securities and Exchange Commission]] has not taken sufficient action against naked shorting.<ref name="WSJ_July2007"/> DTCC says that it has no authority over trading activities, cannot force buy-ins of shares not delivered,<ref name='DTCC-Journal-reply'>{{cite web|url=http://www.dtcc.com/news/press/releases/2007/wsj_response.php?lpos=3&lid=3 |title=DTCC Responds to The Wall Street Journal article, "Blame the 'Stock Vault?'" |accessdate=2009-09-09 |date=2007-07-06 |publisher=Depository Trust & Clearing Corp. }}</ref> and suggests that naked shorting is simply not widespread enough to be a major concern. "We're not saying there is no problem, but to suggest the sky is falling might be a bit overdone," DTCC's chief spokesman Stuart Goldstein said. The [[U.S. Securities and Exchange Commission]] (SEC), however, views naked shorting as a serious enough matter to have made two separate efforts to restrict the practice.<ref name="WSJ_July2007"/> The DTCC says that the SEC has supported its position in legal proceedings.<ref name='DTCC-Journal-reply'/><ref name=Bloomberg>{{cite news
|accessdate=2007-12-25
|url=http://www.rgm.com/articles/bloomberg2.html
|title=Naked Short Sellers Hurt Companies With Stock They Don't Have
|author=Drummond, Bob
|date=August 4, 2006
|publisher=Bloomberg.com}}</ref><ref name=FinancialWire>{{cite news|accessdate=2007-12-25
|url=http://www.rgm.com/articles/financialwire.html
|title=DTCC Chief Spokesperson Denies Existence of Lawsuit
|date=May 11, 2004
|publisher=financialwire.net}}</ref> DTCC General Counsel Larry Thompson calls the claims that DTCC is responsible for naked short selling "pure invention."<ref name="FinancialWire"/>


In 2008, The [[Clearing Corporation]] (CCorp) and The Depository Trust & Clearing Corporation announced CCorp members will benefit from CCorp's netting and risk management processes, and will leverage the asset servicing capabilities of DTCC's [[Trade Information Warehouse]] for [[credit default swap]]s (CDS).<ref>{{cite news|url=http://www.clearingcorp.com/press/pressreleases/20080528-dtcc-cds.html |title=CCorp and DTCC CDS Clearing |publisher=Clearingcorp.com |date=May 29, 2008 |access-date=2012-10-31 |url-status=dead |archive-url=https://web.archive.org/web/20120217043722/http://www.clearingcorp.com/press/pressreleases/20080528-dtcc-cds.html |archive-date=2012-02-17 }}</ref><ref>{{cite web |url=http://www.dtcc.com/products/derivserv/suite/tradeinfo_warehouse.php |title=DTCC " Trade Information Warehouse |publisher=DTCC |access-date=2012-10-31 |url-status=dead |archive-url=https://web.archive.org/web/20091015071528/http://www.dtcc.com/products/derivserv/suite/tradeinfo_warehouse.php |archive-date=2009-10-15 }}</ref><ref>{{cite web|url=http://www.efinancialnews.com/tradingandtechnology/derivatives/content/2451991530 |title=CDS clearing house to launch this year |work=[[Financial News]] |access-date=2012-10-31}}</ref><ref>{{cite web|url = http://www.hedgefundsreview.com/public/showPage.html?page=818032 |title= Moves to bring transparency to otc derivative and cds markets |work=Hedge Funds Review |date=October 2, 2008 | access-date=2012-10-31}}</ref>
In July 2007, Senator [[Bob Bennett (politician)|Bob Bennett]], Republican of Utah, suggested on the [[U.S. Senate]] floor that the allegations involving DTCC and naked short selling are "serious enough" that there should be a hearing on them.<ref name="bennett.senate.gov">[http://bennett.senate.gov/press/record.cfm?id=279519 "Senator Bennett Discusses Naked Short Selling on the Senate Floor," Website of Senator Bennett, July 20, 2007, accessed 32-2-2008]</ref> The committee's Chairman, Senator [[Christopher Dodd]], indicated he was willing to hold such a hearing.<ref name="bennett.senate.gov"/> However, no hearing was ever held, and both Sen. Bennett and Dodd are no longer in the Senate, so any possible investigation seems moot at this point, and no further action on naked short selling is anticipated. The North American Securities Administrators Association, representing state stock regulators, filed a brief in a suit against the DTCC, arguing against federal preemption as a defense to the suit. NASAA said that "if the Investors’ claims are taken as true, as they must be on a motion to dismiss, then the entrepreneurs and investors before the Court have been the victims of fraud and manipulation at the hands of the very entities that should be serving their interests by maintaining a fair and efficient national market.".<ref name='Nasaa-amicus'>{{cite web|url=http://www.nasaa.org/content/Files/Amicus_Whistler_Brief.pdf |title=Amicus brief |accessdate=2009-09-09 |date=2007-03-19 |format=PDF |work=Nasaa.org |publisher=North American Securities Administrators Assn. }}</ref> The Whistler suit was later dismissed by the courts.


On 1 July 2010, it was announced that DTCC had acquired all of the shares of Avox Limited, based in Wrexham, North Wales. [[Deutsche Börse]] had previously held over 76% of the shares. On 20 March 2017, it was announced that [[Thomson Reuters]] acquired Avox.<ref>{{cite web|url=https://www.thomsonreuters.com/en/press-releases/2017/march/thomson-reuters-completes-clarient-and-avox-acquisitions.html | title = Thomson Reuters Completes Clarient and Avox Acquisitions Creating Best-In-Class KYC and Legal Entity Data Due Diligence Standards |access-date=2017-08-14}}</ref>
Critics also contend that DTCC and SEC have been too secretive with information about where naked shorting is taking place.<ref name="WSJ_July2007"/> DTCC says it has supported releasing more information to the public.<ref name='DTCC-Journal-reply'/>


DTCC entered into a joint venture with the [[New York Stock Exchange]] (NYSE) known as New York Portfolio Clearing, that would allow "investors to combine cash and derivative positions in one clearinghouse to lower margin costs".<ref name=Bloomberg20130104>{{cite news |title= Intercontinental Exchange Picked as Top Stock at Sandler O'Neill |url=https://www.bloomberg.com/news/2013-01-04/intercontinental-exchange-picked-as-top-stock-at-sandler-o-neill.html |date=January 4, 2013 |publisher=Bloomberg}}</ref>
==Subsidiaries==
The DTCC has several subsidiaries:
* '''The Depository Trust Company''' (DTC) – The original securities depository.[http://www.dtcc.com/about/subs/dtc.php][http://www.bis.org/publ/cpss20r3.pdf]


DTCC supported the [[Customer Protection and End User Relief Act (H.R. 4413; 113th Congress)]], arguing that it would "help ensure that regulators and the public continue to have access to a consolidated and accurate view of the global marketplace, including concentrations of risk and market exposure".<ref name=DTCCnews>{{cite web|last1=Pagliocca|first1=Theresa|title=Customer Protection and End-User Relief Act (H.R. 4413) Receives House Committee Approval|url=http://www.dtcc.com/news/2014/april/14/customer-protection-and-end-user-relief-act.aspx|publisher=DTCC|access-date=18 June 2014|date=14 April 2014|archive-date=February 9, 2019|archive-url=https://web.archive.org/web/20190209124711/http://www.dtcc.com/news/2014/april/14/customer-protection-and-end-user-relief-act.aspx|url-status=dead}}</ref>
Established in 1973, it was created to reduce costs and provide efficiencies by immobilizing securities and making "book-entry" changes to show ownership of the securities. DTC moves securities for NSCC's net settlements, and settlement for institutional trades (which typically involve money and securities transfers between [[custodian bank]]s and broker-dealers), as well as [[money market]] instruments. In 2007, DTC settled transactions worth $513 trillion, and processed 325 million book-entry deliveries. In addition to settlement services, DTC retains custody of 3.5 million securities issues, worth about $40 trillion, including securities issued in the US and more than 110 other countries. DTC is a member of the U.S. [[Federal Reserve System]], and a registered clearing agency with the [[Securities and Exchange Commission]].


DTCC collateral requirements for brokerages created difficulty for users during the [[GameStop short squeeze]].<ref>{{cite web | url=https://www.ft.com/content/c5a85213-ca41-438d-9087-ff78791eabff | title=Robinhood tightens GameStop trading curbs again as SEC weighs in }}</ref><ref>{{cite web | url=https://qz.com/2184431/robinhood-nearly-defaulted-during-the-gamestop-short-squeeze | title=Robinhood nearly went under during the GameStop short squeeze | date=July 2, 2022 }}</ref><ref>{{cite web | url=https://www.ft.com/content/9a1b24e6-0433-462a-a860-c2504ea565e4 | title=Robinhood raises $1bn from investors and taps banks at end of wild week }}</ref>
Most large U.S. broker-dealers and banks are full DTC participants, meaning that they deposit and hold securities at DTC. DTC appears in an issuer’s stock records as the sole registered owner of securities deposited at DTC. DTC holds the deposited securities in “fungible bulk,” meaning that there are no specifically identifiable shares directly owned by DTC participants. Rather, each participant owns a pro rata interest in the aggregate number of shares of a particular issuer held at DTC. Correspondingly, each customer of a DTC participant, such as an individual investor, owns a pro rata interest in the shares in which the DTC participant has an interest.


In reaction to the [[2022 Russian invasion of Ukraine]], on March 3, 2022, DTCC blocked Russian securities from the [[Bank of Russia]] and [[Ministry of Finance (Russia)|The Ministry of Finance of the Russian Federation]].<ref>{{cite web | url=https://www.securitiesfinancetimes.com/securitieslendingnews/industryarticle.php?article_id=225383&navigationaction=industrynews&newssection=industry | title=DTCC blocks Russian securities from Bank of Russia }}</ref><ref>{{cite web | url=https://www.securitiesfinancetimes.com/securitieslendingnews/industryarticle.php?article_id=225409&navigationaction=industrynews&newssection=industry | title=Russia's sovereign default risk: Into the red zone }}</ref>
Because the securities held by DTC are for the benefit of its participants and their customers (i.e., investors holding their securities at a broker-dealer), frequently the issuer and its transfer agent must interact with DTC in order to facilitate the distribution of dividend payments to investors, to facilitate corporate actions (i.e., mergers, splits, etc.), to effect the transfer of securities, and to accurately record the number of shares actually owned by DTC at all times.


==Operations==
* ''''DTC Operation''''
Stocks held by DTC are kept in the name of its [[partnership]] nominee, Cede & Co.[http://publikationen.ub.uni-frankfurt.de/volltexte/2007/4885/pdf/ILF_WP_068.pdf] Not all securities are eligible to be settled through DTC ("DTC eligible"). What DTC eligibility? This means that a company's stock is eligible for deposit with DTC aka "Cede & Co" aka the Street. Your company's security holders will be able to deposit their particular shares with a brokerage firm. Clearing firms, as full participants with DTC, handle the DTC eligibility submissions to DTC. Transfer agents were responsible for eligibility coordination years ago. Now, in order to make a new issue of securities eligible for DTC’s delivery services, a completed and signed eligibility questionnaire must be submitted to DTC’s Underwriting Department, Eligibility. Parties that may submit the questionnaire include one of the following: Lead Manager/Underwriter, Issuer’s financial advisor or the DTC Participant clearing the transaction for its correspondent. The Lead Manager/ Underwriter must ensure that DTC’s Underwriting Department receives the issue’s offering document (e.g., prospectus, offering memorandum, official statement) and the CUSIP numbers assigned to the issue within the time frames outlined in DTC’s Operational Arrangements.


===DTC===
What is FAST processing? FAST processing is functionality that can be turned on for issuers whom are fully DTC eligible. Participation in FAST (Fast Automated Securities Transfer) allows issuers, security holders and brokerage / clearing firms to move stock electronically between one another. Transfer agents, as limited participants, file for FAST participation. DTC approves each issuer on a merit review basis into this system.
{{Main|Depository Trust Company}}


The '''Depository Trust Company''' (DTC) was the original securities depository.<ref>{{cite web |url=http://www.dtcc.com/about/subs/dtc.php |title=DTCC " The Depository Trust Company (DTC) |publisher=DTCC |access-date= October 31, 2012 |url-status=dead |archive-url=https://web.archive.org/web/20121029072640/http://dtcc.com/about/subs/dtc.php |archive-date=October 29, 2012 }}</ref><ref>{{cite web|url=http://www.bis.org/publ/cpss20r3.pdf |title=CPSS Publications – The Depository Trust Company – Response to the disclosure framework for securities settlement Systems |access-date= October 31, 2012 }}</ref>
Neither DTC eligibility nor FAST participation is mandatory.


Established in 1973, it was created to reduce costs and provide efficiencies by immobilizing securities and making "book-entry" changes to show ownership of the securities.<ref name="Morris_Page_7" /> DTC moves securities for NSCC's net settlements, and settlement for institutional trades (which typically involve money and securities transfers between [[custodian bank]]s and broker-dealers), as well as [[money market]] instruments. In 2022, DTC processed $2.50 quadrillion in transactions. <ref>https://www.dtcc.com/about/-/media/Files/Downloads/Annual-Report-2022/DTCC2022AR-PRINT.pdf</ref> In addition to settlement services, DTC retains custody of 1.4 million securities issues valued at $87.1 trillion, including securities issued in the United States and more than 131 other countries. <ref>https://www.dtcc.com/about/businesses-and-subsidiaries/dtc</ref> DTC is a member of the U.S. [[Federal Reserve System]], and a registered clearing agency with the [[Securities and Exchange Commission]].
What are “chills” and “freezes” and why does DTC impose them? Occasionally a problem may arise with a company or its securities on deposit at DTC. In some of those cases DTC may impose a “chill” or a “freeze” on all the company’s securities. A “chill” is a restriction placed by DTC on one or more of DTC’s services, such as limiting a DTC participant’s ability to make a deposit or withdrawal of the security at DTC. A chill may remain imposed on a security for just a few days or for an extended period of time depending upon the reasons for the chill and whether the issuer or transfer agent corrects the problem. A “freeze” is a discontinuation of all services at DTC. Freezes may last a few days or an extended period of time, depending on the reason for the freeze. If the reasons for the freeze cannot be rectified, then the security will generally be removed from DTC, and securities transactions in that security will no longer be eligible to be cleared at any registered clearing agency. Chills and freezes are monitored by DTC's Office of Regulatory Compliance (ORC) Unit.


Most large U.S. broker-dealers and banks are full DTC participants, meaning that they deposit and hold securities at DTC. DTC appears in an issuer's stock records as the sole registered owner of securities deposited at DTC. DTC holds the deposited securities in "[[Fungibility|fungible]] bulk", meaning that there are no specifically identifiable shares directly owned by DTC participants. Rather, each participant owns a pro rata interest in the aggregate number of shares of a particular issuer held at DTC. Correspondingly, each customer of a DTC participant, such as an individual investor, owns a pro rata interest in the shares in which the DTC participant has an interest.
DTC imposes chills and freezes on securities for various reasons. For example, DTC may impose a chill on a security because the issuer no longer has a transfer agent to facilitate the transfer of the security or the transfer agent is not complying with DTC rules in its interactions with DTC in transferring the security. Often this type of situation is resolved within a short period of time.


Because the securities held by DTC are for the benefit of its participants and their customers (i.e., investors holding their securities at a broker-dealer), frequently the issuer and its transfer agent must interact with DTC in order to facilitate the distribution of dividend payments to investors, to facilitate corporate actions (i.e., mergers, splits, etc.), to effect the transfer of securities, and to accurately record the number of shares actually owned by DTC at all times.
Chills and freezes can be imposed on securities for more complicated reasons, such as when DTC determines that there may be a legal, regulatory, or operational problem with the issuance of the security, or the trading or clearing of transactions involving the security. For example, DTC may chill or freeze a security when DTC becomes aware or is informed by the issuer, transfer agent, federal or state regulators, or federal or state law enforcement officials that an issuance of some or all of the issuer’s securities or transfer in those securities is in violation of state or federal law. If DTC suspects that all or a portion of its holdings of a security may not be freely transferable as is required for DTC services, it may decide to chill one or more of its services or place a freeze on all services for the security. When there is a corporate action, DTC will temporarily chill the security for book-entry activities. In other instances, a corporate action can cause a more permenant chill. This may force the issuer to reapply for eligibility altogether.


===NSCC===
When DTC chills or freezes a security, it will issue a “Participant Notice” to its participants. These notices are publicly available on DTC’s website [http://www.dtcc.com/legal/imp_notices]. When securities are frozen, DTC also provides optional automated notifications to its participants. These processes provide participants the ability to update their systems to automatically block future trading of affected securities, in addition to alerting participant compliance departments. DTC has information regarding these processes on its website.


The '''National Securities Clearing Corporation''' (NSCC) is the original clearing corporation, and provides clearing and serves as the central counterparty for trades in the U.S. securities markets.<ref>{{cite web|url=http://www.dtcc.com/about/subs/nscc.php |title= National Securities Clearing Corporation (NSCC) |publisher=DTCC |access-date= October 31, 2012 }}</ref>
What can investors do? Prior to investing in a security, investors can ask their broker-dealer if there are or ever have been any DTC restrictions placed on any security they are considering buying or selling. This information may affect your decision to purchase or sell the security. The broker-dealer or the broker-dealer’s compliance department should be able to address the inquiry by checking with its back office or by calling its account manager at DTC. Given that DTC does not always disclose the reason for a chill or freeze, a broker-dealer may not be able to provide its customer with information as to why the freeze was imposed or if or when it will be lifted.


Established in 1976, it provides clearing, settlement, risk management, central counterparty services, and a [[guarantee]] of completion for certain transactions for virtually all broker-to-broker trades involving equities, corporate and municipal debt, [[American depositary receipt]]s, [[exchange-traded fund]]s, and [[unit investment trust]]s. NSCC also nets trades and payments among its participants, reducing the value of securities and payments that need to be exchanged by an average of 98% each day. NSCC generally clears and settles trades on a "T+1" basis. NSCC has roughly 4,000 participants, and is regulated by the U.S. Securities and Exchange Commission (SEC).
* '''National Securities Clearing Corporation''' (NSCC) - The original clearing corporation, it provides clearing and serves as the central counterparty for trades in the US securities markets.[http://www.dtcc.com/about/subs/nscc.php]
{{anchor|Fixed Income Clearing Corporation}}


===FICC===
Established in 1976, it provides clearing, settlement, risk management, central counterparty services, and a [[guarantee]] of completion for certain transactions for virtually all broker-to-broker trades involving equities, corporate and municipal debt, American depositary receipts, exchange-traded funds, and [[unit investment trust]]s. NSCC also nets trades and payments among its participants, reducing the value of securities and payments that need to be exchanged by an average of 98% each day. NSCC generally clears and settles trades on a "T+3" basis. NSCC has roughly 4,000 participants,[http://en.wikipedia.org/w/index.php?title=Depository_Trust_%26_Clearing_Corporation&action=submit] and is regulated by the U.S. Securities and Exchange Commission (SEC).


* '''Fixed Income Clearing Corporation''' (FICC) – Provides clearing for [[fixed income securities]], including [[treasury security|treasury securities]] and [[Mortgage-backed security|mortgage backed securities]][http://www.dtcc.com/about/subs/ficc.php][http://www.ficc.com]
The '''Fixed Income Clearing Corporation''' (FICC) provides clearing for [[fixed income securities]], including [[treasury security|treasury securities]] and [[Mortgage-backed security|mortgage backed securities]]<ref>{{cite web |url= http://www.dtcc.com/about/subs/ficc.php |title= Fixed Income Clearing Corporation (FICC) |publisher= DTCC |access-date= 2012-10-31 |url-status= dead |archive-url= https://web.archive.org/web/20121029073807/http://dtcc.com/about/subs/ficc.php |archive-date= 2012-10-29 }}</ref><ref>{{cite web|url=http://www.ficc.com |title= Welcome to Fixed Income Clearance & Settlement |publisher= FICC |access-date=2012-10-31}}</ref>


FICC was created in 2003 to handle fixed income transaction processing, integrating the Government Securities Clearing Corporation and the Mortgage-Backed Securities Clearing Corporation. The Government Securities Division (GSD) provides [[Real-Time Trade Matching]] (RTTM), clearing, [[risk management]], and [[netting]] for trades in US [[Government debt]] issues, including [[repurchase agreement]]s or repos. Securities transactions processed by FICC's Government Securities Division include [[Treasury bill]]s, bonds, notes, [[Zero-coupon bond|zero-coupon]] securities, government agency securities, and inflation-indexed securities. The Mortgage-Backed Securities Division provides real-time automated and trade matching, trade confirmation, risk management, netting, and electronic pool notification to the [[mortgage-backed security|mortgage-backed]] securities market. Participants in this market include mortgage originators, government-sponsored enterprises, registered broker-dealers, [[institutional investor]]s, investment managers, [[mutual fund]]s, commercial banks, insurance companies, and other financial institutions.
FICC was created in 2003 to handle fixed income transaction processing, integrating the Government Securities Clearing Corporation and the Mortgage-Backed Securities Clearing Corporation. The Government Securities Division (GSD) provides real-time trade matching (RTTM), clearing, [[risk management]], and [[netting]] for trades in U.S. [[government debt]] issues, including [[repurchase agreement]]s or repos. Securities transactions processed by FICC's Government Securities Division include [[Treasury bill]]s, bonds, notes, [[Zero-coupon bond|zero-coupon]] securities, government agency securities, and [[Inflation-indexed bond|inflation-indexed securities]]. The Mortgage-Backed Securities Division provides real-time automated and trade matching, trade confirmation, risk management, [[netting]], and electronic pool notification to the [[mortgage-backed security|mortgage-backed]] securities market. Participants in this market include [[Loan origination|mortgage originators]], government-sponsored enterprises, registered broker-dealers, [[institutional investor]]s, investment managers, [[mutual fund]]s, commercial banks, insurance companies, and other financial institutions.


===Global Trade Repository===
* '''DTCC Solutions''' – DTCC’s subsidiary delivering information-based and business processing solutions{{what|date=February 2012}} to financial intermediaries globally, such as Global Corporation Action Validation Service (GCA VS) and Managed Accounts Service.[http://www.dtcc.com/about/subs/solutions.php]


DTCC created Deriv/SERV LLC In 2003 to help resolve [[over the counter]] (OTC) [[Derivative (finance)|derivative]]s challenges of the time. It provides automated matching and confirmation services for derivatives trades, including credit, equity, and [[interest rate derivative]]s. It also provides related matching of payment flows and bilateral netting services. Deriv/SERV's customers include dealers and buy-side firms from 30 countries. In 2006, Deriv/SERV processed 2.6 million transactions.
GCA VS simplifies announcement processing by providing a centralized source of "scrubbed" information about [[corporate action]]s, including [[tender offer]]s, [[Currency conversion|conversions]], [[stock split]]s, and nearly 100 other types of events for equities and fixed-income instruments traded in Europe, Asia-Pacific, and the Americas. In 2006, GCA VS processed 899,000 corporate actions from 160 countries. Managed Accounts Service, introduced in 2006, standardizes the exchange of account and investment information through a central gateway.


From 2006 this service was complemented by the '''[[Trade Information Warehouse]]''' (TIW), an infrastructure that records all [[Credit derivative]]s transactions, such as [[Credit default swap]]s. This proved specifically useful in September 2008 by helping authorities and market participants understand exposures to failing or fragile counterparties such as [[Lehman Brothers]] or [[American International Group|AIG]].<ref>{{cite journal|url=https://www.dtcc.com/-/media/Files/Downloads/Bylined-Articles/BdF_White_Paper_Bodson_Article.pdf |author=Michael Bodson |title=New infrastructures for a sounder financial system |journal=Financial Stability Review |publisher=Banque de France |date=April 2013}}</ref> Partly based on that experience, the [[G20]] in 2009 decided to mandate derivatives trade reporting across all derivatives asset classes (interest rates, currencies, equity, credit, and commodities), with the reports collected by regulated [[Trade Repository|Trade Repositories]]. The reporting mandate was subsequently enshrined in legislation in the respective jurisdictions, e.g. the [[Dodd–Frank Wall Street Reform and Consumer Protection Act|Dodd–Frank Act]] in the U.S. and [[European Market Infrastructure Regulation|EMIR]] in the European Union.
* '''DTCC Learning''' – Provides financial, technology, and career training and educational services to the global financial industry.[http://www.dtcc.com/products/training.php]


In May 2011, the [[International Swaps and Derivatives Association]] selected DTCC to build up a global industry-wide infrastructure to comply with the G20 mandate, and the service was started in December 2011.<ref>{{cite web|website=Business Wire |title=DTCC startet globales Transaktionsregister für OTC-Zinsderivate |url=https://www.businesswire.com/news/home/20111207006819/de/ |date=7 December 2011}}</ref> The trade repository service was branded '''Global Trade Repository''' (GTR) in 2012. It was deployed that year in the U.S. under [[Commodity Futures Trading Commission|CFTC]] supervision, and in 2013 in Australia under [[Australian Securities and Investments Commission|ASIC]] supervision, Hong Kong as an agent of [[Hong Kong Monetary Authority|HKMA]], Japan under [[Financial Services Agency|FSA]] supervision, and Singapore under [[Monetary Authority of Singapore|MAS]] supervision. In November 2013, DTCC obtained a license from [[European Securities and Markets Authority|ESMA]] to operate its trade repository in the European Union, based in London and starting in February 2014,<ref>{{cite web|website=Institutional Asset Manager |title=ESMA approves DTCC trade repository in Europe |url=https://www.institutionalassetmanager.co.uk/2013/11/11/192784/esma-approves-dtcc-trade-repository-europe |date=11 November 2013}}</ref> and in 2019 that service was extended to Switzerland under [[Swiss Financial Market Supervisory Authority|FINMA]] supervision. From 2018, DTCC built up its GTR infrastructure to also support securities financing transaction reporting in the European Union under the EU [[Securities Financing Transactions Regulation]] (SFTR). In the wake of [[Brexit]], DTCC created an EU entity based in Dublin, which ESMA registered as an EU trade repository in late 2020,<ref>{{cite web|website=ESMA |url=https://www.esma.europa.eu/press-news/esma-news/esma-registers-dtcc-data-repository-ireland-plc-trade-repository-under-emir-and |title=ESMA Registers DTCC Data Repository (Ireland) PLC as Trade Repository under EMIR and SFTR |date=18 December 2020}}</ref> which on 1 January 2021 took over part of the activity previously reported to the UK trade repository. In compliance with legislation in the individual jurisdictions, DTCC operates trade repositories under several legal entities across the world, but keeps the original vision of a globally integrated reporting utility.<ref>{{cite web|website=DTCC |author=Chris Childs |title=Regulators Narrow the Distance to Reach Data Standardization for Global Derivatives Reporting |url=https://www.dtcc.com/dtcc-connection/articles/2020/april/20/regulators-narrow-the-distance-to-reach-data-standardization-for-global-derivatives-reporting |date=20 April 2020}}</ref>
* '''Loan/SERV''' - Provides services to loan [[syndicate]]s and agents.


In 2019, DTCC rebranded its derivatives and trade repository businesses, including the GTR and TIW, as '''Repository and Derivatives Services''' (RDS).
* '''Deriv/SERV''' – Provides clearing for [[credit derivative]]s, such as [[Collateralized debt obligation|CDOs]].[http://www.dtcc.com/about/subs/derivserv.php]


===Other operations===
It provides automated matching and confirmation services for [[over the counter]] (OTC) [[derivative]]s trades, including credit, equity, and [[interest rate derivative]]s. It also provides related matching of payment flows and [[wiktionary:bilateral|bilateral]] netting services. Deriv/SERV's customers include dealers and buy-side firms from 30 countries. In 2006, Deriv/SERV processed 2.6 million transactions.
{{advert|date=November 2021}}
'''DTCC Solutions''' is DTCC's subsidiary, formerly named Global Asset Solutions, delivering information-based and business processing solutions relative to securities and securities transactions to financial intermediaries globally, such as Global Corporation Action Validation Service (GCA VS) and Managed Accounts Service.<ref>{{cite web |url=http://www.dtcc.com/about/subs/solutions.php |title=DTCC Solutions LLC |publisher=DTCC |access-date= October 31, 2012 |url-status=dead |archive-url=https://web.archive.org/web/20121029074051/http://dtcc.com/about/subs/solutions.php |archive-date= October 29, 2012 }}</ref>


GCA VS provides a centralized source of information about [[corporate action]]s, including [[tender offer]]s, [[Currency conversion|conversions]], [[stock split]]s, and nearly 100 other types of events for equities and fixed-income instruments traded in Europe, Asia Pacific, and the Americas. In 2006, GCA VS processed 899,000 corporate actions from 160 countries. Managed Accounts Service, introduced in 2006, standardizes the exchange of account and investment information through a central gateway.
* '''EuroCCP''' – European Central Counterparty Limited (EuroCCP) is the European subsidiary of DTCC that provides equities clearing services on a pan-European basis. Headquartered in London, EuroCCP is a UK-incorporated Recognised Clearing House regulated by the UK’s Financial Services Authority (FSA).
EuroCCP began operations in August 2008, initially clearing for the pan-European trading platform [[Turquoise (trading platform)|Turquoise]]. EuroCCP has subsequently secured appointments from additional trading platforms and now provides central counterparty services for equity trades to Turquoise, SmartPool, NYSE Arca Europe and Pipeline Financial Group Limited. EuroCCP clears trades in more than 6,000 equities issues for these trading venues. In October 2009 EuroCCP began clearing and settling trades made on the Turquoise platform in 120 of the most heavily-traded listed Depositary Receipts.
Citi Global Transaction Services acts as settlement agent for trades cleared by EuroCCP. EuroCCP now provides clearing services in 15 major national markets in Europe: Austria, Belgium, France, Denmark, Germany, Ireland, Italy, Finland, Netherlands, Norway, Portugal, United Kingdom, Switzerland, Sweden and Spain. Trades are handled in seven different currencies: the Euro, British Pound, U.S. Dollar, Swiss Franc, Danish Krone, Swedish Krona, and Norwegian Krone.
[http://www.dtcc.com/about/subs/euroccp.php; http://euroccp.co.uk/]


'''DTCC Learning''' provides financial, technology, and career training and educational services to the global financial industry.<ref>{{cite web|url=http://www.dtcclearning.com |title=Welcome to DTCC Learning Center! |publisher=DTCC Learning Center |access-date= November 19, 2015 }}</ref>
* '''Omgeo''' – Partnership with [[Thomson Reuters]] that provides clearing automation solutions{{what|date=February 2012}}.[http://www.dtcc.com/about/subs/omgeo.php][http://www.omgeo.com/]


'''Loan/SERV''' provides services to loan [[syndicate]]s and agents.
Omgeo is a central [[information management]] and processing hub for broker-dealers, investment managers, and custodian banks. It provides post-trade, pre-settlement institutional trade management solutions{{what|date=February 2012}}, processes over one million trades per day and serves 6,000 investment managers, broker/dealers, and custodians in 42 countries.


'''Omgeo''' is a central [[information management]] and processing hub for broker-dealers, investment managers, and custodian banks. It provides post-trade, pre-settlement institutional trade management solutions for the securities clearance and settlement industry, processes over one million trades per day, and serves 6,000 investment managers, broker/dealers, and custodians in 42 countries.<ref name=omgeo>{{cite web|url=http://www.omgeo.com/aboutomgeo |title=Post-Trading Solutions for the Global Investment Industry |publisher=Omgeo |access-date= November 19, 2015 }}</ref> Omgeo was formed in 2001 as a joint venture between DTCC and [[Thomson Reuters]] combining various trade services previously provided by each of these organizations.<ref name=omgeo /><ref>{{cite web|url=http://www.dtcc.com/about/subs/omgeo.php|title=Omgeo LLC|publisher=DTCC|access-date= October 31, 2012 |url-status=dead|archive-url=https://web.archive.org/web/20121029073555/http://dtcc.com/about/subs/omgeo.php|archive-date= October 29, 2012 }}</ref> In November 2013 DTCC bought back Thomson Reuters' interest in the firm, so it is now wholly owned by DTCC.
==Competition==
[[Euroclear]] (in [[Brussels, Belgium]]) and [[Clearstream]] (in [[Luxembourg]]) are the second and third largest [[central securities depositories]] in the world.


==References==
==Leadership==
<references/>
<http://www.finra.org/Newsroom/Statistics/>


* William T. Dentzer Jr, DTC Chairman & CEO, 1973-1994<ref>{{Cite web|url=https://www.wsj.com/articles/william-dentzer-helped-wall-street-unsnarl-its-paperwork-11613055610|title=William Dentzer Helped Wall Street Unsnarl Its Paperwork; Former CIA operative, who died at age 91, led early clearinghouse for stock trades |first=James R.|last=Hagerty|date=February 11, 2021|work=The Wall Street Journal}}</ref><ref name="auto">{{Cite web|url=https://www.dtcc.com/dtcc-anniversary/index.html|title=DTCC 40 Anniversary|website=www.dtcc.com}}</ref>
==External links==
* William F. Jaenike, DTC Chairman & CEO, 1994-1999<ref name="auto"/><ref>{{Cite web|url=https://alabama.ebscoed.com/eds/detail|title=Alabama Education|website=Alabama Education}}</ref>
*[http://www.dtcc.com DTCC corporate site]
* Jill M. Considine, DTC then DTCC Chairman & CEO, 1999-2006<ref>{{cite web|website=LCH |title=Jill M Considine - Independent |url=https://www.lch.com/about-us/structure-and-governance/board-directors/jill-m-considine-independent }}</ref><ref>{{cite web|website=Securities and Exchange Commission Historical Society |title=Interview with Jill Considine conducted on August 1, 2011, by James Stocker |url=http://3197d6d14b5f19f2f440-5e13d29c4c016cf96cbbfd197c579b45.r81.cf1.rackcdn.com/collection/oral-histories/20110801_Considine_Jill_T.pdf |date=2011}}</ref>
*[http://www.bis.org/publ/cpss20r3.pdf Extensive description of DTC and its activities]
* Donald F. Donahue, Chairman 2006-2011 and CEO 2006-2012<ref>{{cite web|website=Finextra |url=https://www.finextra.com/pressarticle/14610/considine-to-step-down-at-dtcc-donahue-and-aimetti-move-up |title=Considine to step down at DTCC; Donahue and Aimetti move up |date=25 April 2007}}</ref>
*[http://www.bis.org/publ/cpss20_usnscc.pdf Extensive description of NSCC and its activities]
* Robert Druskin, Executive Chairman 2011-2015 and Non-executive Chairman 2015-2023
*[https://login.dtcc.com/dtcorg/ DTC corporate site]
* Michael Bodson, President & CEO 2012-2022<ref>{{Cite web|date=2012-04-23|title=DTCC Board of Directors Elects Michael C. Bodson President and CEO|url=https://www.businesswire.com/news/home/20120423006038/en/DTCC-Board-Directors-Elects-Michael-C.-Bodson|access-date=2020-08-26|website=Businesswire|language=en}}</ref>
*[http://www.nscc.com NSCC corporate site]
* Frank La Salla, President & CEO since 2022<ref>{{cite press release |title=Frank La Salla succeeded Michael C. Bodson, who has retired after a decade leading the company |date=April 25, 2022 |url=https://www.businesswire.com/news/home/20220425005635/en/DTCC-Board-of-Directors-Appoints-Frank-La-Salla-President-Chief-Executive-Officer}}</ref>
*[http://www.dtcc.com/Careers/history.htm Source for History]
* Kevin Kessinger, Non-executive Chairman since {{date|2024/01/01}}
*[http://www.ecb.europa.eu/paym/t2s/html/index.en.html T2S Project of the Eurosystem]

*[http://publikationen.ub.uni-frankfurt.de/volltexte/2007/4885/pdf/ILF_WP_068.pdf "The Rise and Effects of the Indirect Holding System: How Corporate America Ceded its Shareholders to Intermediaries," by David C. Donald, Institute for Law and Finance, 18/09/07]
The board was composed of 21 members as of 2019.<ref name= annual-report-2019>{{Cite web|url=https://www.dtcc.com/annuals/2019/leadership/|title=DTCC 2019 Annual Report|publisher=DTCC |access-date=April 15, 2020 }}</ref><ref name= board>{{Cite web|url=https://www.dtcc.com/about/leadership|title=Leadership - The DTCC Board |publisher = DTCC |access-date=April 15, 2020 }}</ref> Two board members are selected by "preferred shareholders" [[Intercontinental Exchange|ICE]] and [[Financial Industry Regulatory Authority|FINRA]], while 14 are from international clearing agencies.<ref name= board/>

== See also ==

* [[China Central Depository & Clearing]]
* [[China Securities Depository and Clearing Corporation]]
* [[Clearstream]]
* [[CREST (securities depository)]]
* [[Euroclear]]
* [[Korea Securities Depository]]
* [[LCH (clearing house)]]
* [[National Settlement Depository (Russia)]]
* [[Stock transfer agent]]

== References ==
{{Reflist|30em}}

== External links ==
* {{Official website}}


{{World Federation of Exchanges}}
{{World Federation of Exchanges}}
{{Authority control}}
{{Coord|40.7032| -74.0091|display=title}}


{{DEFAULTSORT:Depository Trust and Clearing Corporation}}
[[Category:Financial services companies based in New York City]]
[[Category:Securities]]
[[Category:Financial services companies of the United States]]
[[Category:Self-regulatory organizations]]
[[Category:Central securities depositories]]
[[Category:Systemic risk]]
[[Category:Systemically important financial market utility]]
[[Category:Central Securities Depositories]]
[[Category:Securities clearing and depository institutions]]
[[Category:Securities clearing and depository institutions]]
[[Category:Payment systems]]
[[Category:Payment systems]]
[[Category:Companies established in 1973]]
[[Category:Self-regulatory organizations in the United States]]
[[Category:Companies established in 1976]]
[[Category:Financial services companies based in New York City]]
[[Category:Article Feedback 5]]
[[Category:American companies established in 1999]]
[[Category:Financial services companies established in 1999]]

[[Category:Holding companies established in 1999]]
[[de:Depository Trust and Clearing Corporation]]
[[Category:1999 establishments in New York City]]
[[Category:Companies based in New York City]]
[[Category:1999 establishments in the United States]]

Revision as of 12:35, 15 May 2024

Depository Trust & Clearing Corporation
Company typePrivate
IndustryFinance
GenreHolding company
FoundedDTCC (1999) – holding company for DTC (1973) and NSCC (1976)
Headquarters
570 Washington Blvd
Jersey City, NJ
,
U.S.
Number of locations
10
Key people
Kevin Kessinger, Non-executive Chairman
Frank La Salla, President and CEO
ServicesFinancial
RevenueUS$1,784,368,000 (2018)[1]
US$299,713,000 (2018)[1]
Total assetsUS$46,971,101,000 (2018)[1]
Total equityUS$2,332,235,000 (2018)[1]
OwnerBanks, brokers
Number of employees
4,300[2]
SubsidiariesNSCC
DTC
FICC
DTCC Deriv/SERV LLC
DTCC Solutions LLC
EuroCCP Ltd.
DTCC Loan/SERV LLC
Warehouse Trust Company LLC
DTCC Derivatives Repository Ltd.
Websitewww.dtcc.com

The Depository Trust & Clearing Corporation (DTCC) is an American financial market infrastructure company that provides clearing, settlement and trade reporting services to financial market participants. It performs the exchange of securities on behalf of buyers and sellers and functions as a central securities depository by providing central custody of securities.

DTCC was established in 1999 as a holding company to combine The Depository Trust Company (DTC) and National Securities Clearing Corporation (NSCC). User-owned and directed, it automates, centralizes, standardizes, and streamlines processes in the capital markets.[3] Through its subsidiaries, DTCC provides clearance, settlement, and information services for equities, corporate and municipal bonds, unit investment trusts, government and mortgage-backed securities, money market instruments, and over-the-counter derivatives. It also manages transactions between mutual funds and insurance carriers and their respective investors.

In 2011, DTCC settled the vast majority of securities transactions in the United States and close to $1.7 quadrillion[4][5][6] in value worldwide, making it by far the highest financial value processor in the world.[6] DTCC operates facilities in the New York metropolitan area, and at multiple locations in and outside the United States.[7]

History

Established in 1973, The Depository Trust Company (DTC) was created to alleviate the rising volumes of paperwork and the lack of security that developed after rapid growth in the volume of transactions in the U.S. securities industry in the late 1960s.[8]

1960s Wall Street paperwork crisis

Before DTC and NSCC were formed, brokers physically exchanged certificates, employing hundreds of messengers to carry certificates and cheques. The mechanisms brokers used to transfer securities and keep records relied heavily on pen and paper. The exchange of physical stock certificates was difficult, inefficient, and increasingly expensive. Before 1946, the SEC had allowed for T+2 settlement (that is, settlement within two days of the trade date), but by the early 1960s, this deadline had been lengthened to four days and then five.[9]

In the late 1960s, with an unprecedented surge in trading leading to volumes of nearly 15 million shares a day on the NYSE in April 1968 (as opposed to 5 million a day just three years earlier, which at the time had been considered overwhelming), the paperwork burden became enormous.[10][11] Stock certificates were left for weeks piled haphazardly on any level surface, including filing cabinets and tables. Stocks were mailed to wrong addresses, or not mailed at all. Overtime and night work became mandatory. Turnover was 60% a year.[12]

To help brokerage firms catch up on the overwhelming volume of paperwork, the stock exchanges were forced to close every week (they chose every Wednesday), and trading hours were shortened on other days of the week.[9]

Industry response

The first response was to hold all paper stock certificates in one centralized location, and automate the process by keeping electronic records of all certificates and securities clearing and settlement (changes of ownership and other securities transactions).[13]

One problem was state laws requiring brokers to deliver certificates to investors. Eventually all the states were convinced that this notion was obsolete and changed their laws. For the most part, investors can still request their certificates, but this has several inconveniences, and most people do not, except for novelty value.

This led the New York Stock Exchange to establish the Central Certificate Service (CCS) in 1968[14] at 44 Broad Street in New York City.[12] Anthony P. Reres was appointed the head of CCS. NYSE President Robert W. Haack promised: "We are going to automate the stock certificate out of business by substituting a punch card. We just can't keep up with the flood of business unless we do".[15] The CCS transferred securities electronically, eliminating their physical handling for settlement purposes, and kept track of the total number of shares held by NYSE members.[16] This relieved brokerage firms of the work of inspecting, counting, and storing certificates. Haack labeled it "top priority", $5 million was spent on it,[17] and its goal was to eliminate up to 75% of the physical handling of stock certificates traded between brokers.[15] One problem, however, was that it was voluntary, and brokers responsible for two-thirds of all trades refused to use it.[11]

By January 1969, it was transferring 10,000 shares per day, and plans were made for it to be handling broker-to-broker transactions in 1,300 issues by March 1969.[18] In 1970 the CCS service was extended to the American Stock Exchange.[19] This led to the development of the Banking and Securities Industry Committee (BASIC), which represented leading U.S. banks and securities exchanges,[20] and was headed by a banker named Herman Beavis, and finally the development of DTC in 1973,[21] which was headed by William (Bill) T. Dentzer Jr., a former US intelligence community member and New York State Banking Superintendent.[22][23] All the top New York banks were represented on the board, usually by their chairman. BASIC and the SEC saw this indirect holding system as a "temporary measure", on the way to a "certificateless society".[20]

Today, all physical shares of paper stock certificates are held by a separate entity, Cede and Company.[13]

The second response involves multilateral netting; and led to the formation of the National Securities Clearing Corporation (NSCC) in 1976.

EuroCCP

European Central Counterparty Limited (EuroCCP) used to be a European subsidiary of DTCC from 2008 to 2020. It provides equities clearing services on a pan-European basis. Headquartered in London, EuroCCP is a UK-incorporated Recognised Clearing House regulated by the UK's Financial Services Authority (FSA). In December 2019, EuroCCP announced it would be purchased by Cboe Global Markets.[24]

EuroCCP began operations in August 2008, initially clearing for the pan-European trading platform Turquoise. EuroCCP has subsequently secured appointments from additional trading platforms and now provides central counterparty services for equity trades to Turquoise, SmartPool, NYSE Arca Europe and Pipeline Financial Group Limited. EuroCCP clears trades in more than 6,000 equities issues for these trading venues. In October 2009, EuroCCP began clearing and settling trades made on the Turquoise platform in 120 of the most heavily traded listed Depositary Receipts.[citation needed]

Citi Global Transaction Services acts as settlement agent for trades cleared by EuroCCP, which now provides clearing services in 15 major national markets in Europe: Austria, Belgium, France, Denmark, Germany, Ireland, Italy, Finland, Netherlands, Norway, Portugal, United Kingdom, Switzerland, Sweden and Spain. Trades are handled in seven different currencies: the Euro, British Pound, U.S. Dollar, Swiss Franc, Danish Krone, Swedish Krona, and Norwegian Krone.[25][26]

Later developments

In 2008, The Clearing Corporation (CCorp) and The Depository Trust & Clearing Corporation announced CCorp members will benefit from CCorp's netting and risk management processes, and will leverage the asset servicing capabilities of DTCC's Trade Information Warehouse for credit default swaps (CDS).[27][28][29][30]

On 1 July 2010, it was announced that DTCC had acquired all of the shares of Avox Limited, based in Wrexham, North Wales. Deutsche Börse had previously held over 76% of the shares. On 20 March 2017, it was announced that Thomson Reuters acquired Avox.[31]

DTCC entered into a joint venture with the New York Stock Exchange (NYSE) known as New York Portfolio Clearing, that would allow "investors to combine cash and derivative positions in one clearinghouse to lower margin costs".[32]

DTCC supported the Customer Protection and End User Relief Act (H.R. 4413; 113th Congress), arguing that it would "help ensure that regulators and the public continue to have access to a consolidated and accurate view of the global marketplace, including concentrations of risk and market exposure".[33]

DTCC collateral requirements for brokerages created difficulty for users during the GameStop short squeeze.[34][35][36]

In reaction to the 2022 Russian invasion of Ukraine, on March 3, 2022, DTCC blocked Russian securities from the Bank of Russia and The Ministry of Finance of the Russian Federation.[37][38]

Operations

DTC

Main article: Depository Trust Company

The Depository Trust Company (DTC) was the original securities depository.[39][40]

Established in 1973, it was created to reduce costs and provide efficiencies by immobilizing securities and making "book-entry" changes to show ownership of the securities.[13] DTC moves securities for NSCC's net settlements, and settlement for institutional trades (which typically involve money and securities transfers between custodian banks and broker-dealers), as well as money market instruments. In 2022, DTC processed $2.50 quadrillion in transactions. [41] In addition to settlement services, DTC retains custody of 1.4 million securities issues valued at $87.1 trillion, including securities issued in the United States and more than 131 other countries. [42] DTC is a member of the U.S. Federal Reserve System, and a registered clearing agency with the Securities and Exchange Commission.

Most large U.S. broker-dealers and banks are full DTC participants, meaning that they deposit and hold securities at DTC. DTC appears in an issuer's stock records as the sole registered owner of securities deposited at DTC. DTC holds the deposited securities in "fungible bulk", meaning that there are no specifically identifiable shares directly owned by DTC participants. Rather, each participant owns a pro rata interest in the aggregate number of shares of a particular issuer held at DTC. Correspondingly, each customer of a DTC participant, such as an individual investor, owns a pro rata interest in the shares in which the DTC participant has an interest.

Because the securities held by DTC are for the benefit of its participants and their customers (i.e., investors holding their securities at a broker-dealer), frequently the issuer and its transfer agent must interact with DTC in order to facilitate the distribution of dividend payments to investors, to facilitate corporate actions (i.e., mergers, splits, etc.), to effect the transfer of securities, and to accurately record the number of shares actually owned by DTC at all times.

NSCC

The National Securities Clearing Corporation (NSCC) is the original clearing corporation, and provides clearing and serves as the central counterparty for trades in the U.S. securities markets.[43]

Established in 1976, it provides clearing, settlement, risk management, central counterparty services, and a guarantee of completion for certain transactions for virtually all broker-to-broker trades involving equities, corporate and municipal debt, American depositary receipts, exchange-traded funds, and unit investment trusts. NSCC also nets trades and payments among its participants, reducing the value of securities and payments that need to be exchanged by an average of 98% each day. NSCC generally clears and settles trades on a "T+1" basis. NSCC has roughly 4,000 participants, and is regulated by the U.S. Securities and Exchange Commission (SEC).

FICC

The Fixed Income Clearing Corporation (FICC) provides clearing for fixed income securities, including treasury securities and mortgage backed securities[44][45]

FICC was created in 2003 to handle fixed income transaction processing, integrating the Government Securities Clearing Corporation and the Mortgage-Backed Securities Clearing Corporation. The Government Securities Division (GSD) provides real-time trade matching (RTTM), clearing, risk management, and netting for trades in U.S. government debt issues, including repurchase agreements or repos. Securities transactions processed by FICC's Government Securities Division include Treasury bills, bonds, notes, zero-coupon securities, government agency securities, and inflation-indexed securities. The Mortgage-Backed Securities Division provides real-time automated and trade matching, trade confirmation, risk management, netting, and electronic pool notification to the mortgage-backed securities market. Participants in this market include mortgage originators, government-sponsored enterprises, registered broker-dealers, institutional investors, investment managers, mutual funds, commercial banks, insurance companies, and other financial institutions.

Global Trade Repository

DTCC created Deriv/SERV LLC In 2003 to help resolve over the counter (OTC) derivatives challenges of the time. It provides automated matching and confirmation services for derivatives trades, including credit, equity, and interest rate derivatives. It also provides related matching of payment flows and bilateral netting services. Deriv/SERV's customers include dealers and buy-side firms from 30 countries. In 2006, Deriv/SERV processed 2.6 million transactions.

From 2006 this service was complemented by the Trade Information Warehouse (TIW), an infrastructure that records all Credit derivatives transactions, such as Credit default swaps. This proved specifically useful in September 2008 by helping authorities and market participants understand exposures to failing or fragile counterparties such as Lehman Brothers or AIG.[46] Partly based on that experience, the G20 in 2009 decided to mandate derivatives trade reporting across all derivatives asset classes (interest rates, currencies, equity, credit, and commodities), with the reports collected by regulated Trade Repositories. The reporting mandate was subsequently enshrined in legislation in the respective jurisdictions, e.g. the Dodd–Frank Act in the U.S. and EMIR in the European Union.

In May 2011, the International Swaps and Derivatives Association selected DTCC to build up a global industry-wide infrastructure to comply with the G20 mandate, and the service was started in December 2011.[47] The trade repository service was branded Global Trade Repository (GTR) in 2012. It was deployed that year in the U.S. under CFTC supervision, and in 2013 in Australia under ASIC supervision, Hong Kong as an agent of HKMA, Japan under FSA supervision, and Singapore under MAS supervision. In November 2013, DTCC obtained a license from ESMA to operate its trade repository in the European Union, based in London and starting in February 2014,[48] and in 2019 that service was extended to Switzerland under FINMA supervision. From 2018, DTCC built up its GTR infrastructure to also support securities financing transaction reporting in the European Union under the EU Securities Financing Transactions Regulation (SFTR). In the wake of Brexit, DTCC created an EU entity based in Dublin, which ESMA registered as an EU trade repository in late 2020,[49] which on 1 January 2021 took over part of the activity previously reported to the UK trade repository. In compliance with legislation in the individual jurisdictions, DTCC operates trade repositories under several legal entities across the world, but keeps the original vision of a globally integrated reporting utility.[50]

In 2019, DTCC rebranded its derivatives and trade repository businesses, including the GTR and TIW, as Repository and Derivatives Services (RDS).

Other operations

DTCC Solutions is DTCC's subsidiary, formerly named Global Asset Solutions, delivering information-based and business processing solutions relative to securities and securities transactions to financial intermediaries globally, such as Global Corporation Action Validation Service (GCA VS) and Managed Accounts Service.[51]

GCA VS provides a centralized source of information about corporate actions, including tender offers, conversions, stock splits, and nearly 100 other types of events for equities and fixed-income instruments traded in Europe, Asia Pacific, and the Americas. In 2006, GCA VS processed 899,000 corporate actions from 160 countries. Managed Accounts Service, introduced in 2006, standardizes the exchange of account and investment information through a central gateway.

DTCC Learning provides financial, technology, and career training and educational services to the global financial industry.[52]

Loan/SERV provides services to loan syndicates and agents.

Omgeo is a central information management and processing hub for broker-dealers, investment managers, and custodian banks. It provides post-trade, pre-settlement institutional trade management solutions for the securities clearance and settlement industry, processes over one million trades per day, and serves 6,000 investment managers, broker/dealers, and custodians in 42 countries.[53] Omgeo was formed in 2001 as a joint venture between DTCC and Thomson Reuters combining various trade services previously provided by each of these organizations.[53][54] In November 2013 DTCC bought back Thomson Reuters' interest in the firm, so it is now wholly owned by DTCC.

Leadership

  • William T. Dentzer Jr, DTC Chairman & CEO, 1973-1994[55][56]
  • William F. Jaenike, DTC Chairman & CEO, 1994-1999[56][57]
  • Jill M. Considine, DTC then DTCC Chairman & CEO, 1999-2006[58][59]
  • Donald F. Donahue, Chairman 2006-2011 and CEO 2006-2012[60]
  • Robert Druskin, Executive Chairman 2011-2015 and Non-executive Chairman 2015-2023
  • Michael Bodson, President & CEO 2012-2022[61]
  • Frank La Salla, President & CEO since 2022[62]
  • Kevin Kessinger, Non-executive Chairman since 1 January 2024

The board was composed of 21 members as of 2019.[63][64] Two board members are selected by "preferred shareholders" ICE and FINRA, while 14 are from international clearing agencies.[64]

See also

References

  1. ^ a b c d http://www.dtcc.com/~/media/Files/Downloads/legal/financials/2019/DTCC-Annual-Financial-Statements-2018-and-2017.pdf [bare URL PDF]
  2. ^ "DTCC Named to the Forbes Best Employers List | DTCC". www.dtcc.com.
  3. ^ "Depository Trust Company – DTC". Investopedia. Retrieved March 18, 2015.
  4. ^ "New DTCC Data Products Service To Provide Dynamic Data Provisioning and Easier Access to DTCC Data". DTCC. June 30, 2015. Archived from the original on March 5, 2016. Retrieved April 1, 2016.
  5. ^ "DTCC Settles Record $1.8 Quadrillion in 2007; $984 Million in Rebates Returned to Customers". Business Wire. March 25, 2008. Retrieved April 1, 2016.
  6. ^ a b "Quadrillion dollar corporation at the heart of the financial system". Australian Financial Review. July 7, 2015. Retrieved April 1, 2016.
  7. ^ "The Muse brings you inside the office of DTCC". The Muse. Retrieved March 17, 2023.
  8. ^ William T. Dentzer Jr. (2008). The Depository Trust Company: DTC's Formative Years and Creation of The Depository Trust & Clearing Corporation (DTCC). YBK Publishers.
  9. ^ a b Morris, Virginia B.; Goldstein, Stuart A. (2009). Guide to Clearance & Settlement: An Introduction to DTCC. New York: Lightbulb Press. p. 4. ISBN 9781933569987. Retrieved November 20, 2022.
  10. ^ Wells, Wyatt (January 1, 2000). "Certificates and Computers: The Remaking of Wall Street, 1967 to 1971". Business History Review. 74 (2): 193–235. doi:10.2307/3116692. JSTOR 3116692. S2CID 154737499.
  11. ^ a b Alec Benn (2000). The Unseen Wall Street of 1969–1975: And Its Significance for Today. Bloomsbury Academic. ISBN 978-1-56720-333-2. Retrieved October 31, 2012 – via Google Books.
  12. ^ a b "Liberty Park, USA Foundation". Archived from the original on October 28, 2008.
  13. ^ a b c Morris, Virginia B.; Goldstein, Stuart A. (2009). Guide to Clearance & Settlement: An Introduction to DTCC. New York: Lightbulb Press. p. 7. ISBN 9781933569987. Retrieved November 20, 2022.
  14. ^ "Wall Street: Attack on the Snarl", Time, May 24, 1968.
  15. ^ a b "Wall Street: Speeding It Up". Time. March 15, 1968. Retrieved October 31, 2012.
  16. ^ "About Us > History > Timeline > Timeline 1930 "Black Box" Ticker". New York Stock Exchange. March 15, 1968. Archived from the original on May 8, 2015. Retrieved August 26, 2017.
  17. ^ "Computer Usage – Fall Issue 1968" (PDF). computerhistroy.org. Retrieved October 31, 2012.
  18. ^ "Remarks of Robert W. Haack: President of the New York Stock Exchange – 1969" (PDF). Securities and Exchange Commission Historical Society. Retrieved October 31, 2012.
  19. ^ "Business: A Bear Market for Brokers". Time. June 15, 1970. Archived from the original on January 14, 2009. Retrieved October 31, 2012.
  20. ^ a b "Institute of Law" (PDF). Publikationen.ub.uni-frankfurt.de. Retrieved October 31, 2012.
  21. ^ "Bill Maurer – Forget Locke?: From Proprietor to Risk-Bearer in New Logics of Finance – Public Culture 11:2". Archived from the original on August 16, 2007. Retrieved March 11, 2017.
  22. ^ Susan Dentzer (August 28, 2019). "The Greatest Father from a Great Generation". Medium.
  23. ^ "Securities and Exchange Commission Historical Society Interview with Donald Calvin" (PDF). November 21, 2008. Archived from the original (PDF) on November 21, 2008.
  24. ^ "Cboe To Buy European Equities Clearing House EuroCCP". Business Insider. December 10, 2019.
  25. ^ "About DTCC – European Central Counterparty Ltd. (EuroCCP)". DTCC. January 6, 2012. Archived from the original on October 29, 2012. Retrieved October 31, 2012.
  26. ^ "Welcome to EuroCCP". European Central Counterparty. Archived from the original on June 25, 2012. Retrieved October 31, 2012.
  27. ^ "CCorp and DTCC CDS Clearing". Clearingcorp.com. May 29, 2008. Archived from the original on February 17, 2012. Retrieved October 31, 2012.
  28. ^ "DTCC " Trade Information Warehouse". DTCC. Archived from the original on October 15, 2009. Retrieved October 31, 2012.
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External links

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