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'''The Depository Trust & Clearing Corporation''' (DTCC), based primarily at 55 Water Street in ], is the world’s largest post-trade infrastructure organization. It was set up to provide an efficient and safe way for buyers and sellers of ] to make their exchange, and thus "] and ]" transactions. '''The Depository Trust & Clearing Corporation''' (DTCC), based primarily at 55 Water Street in ], is the world’s largest post-trade infrastructure organization. It was set up to provide an efficient and safe way for buyers and sellers of ] to make their exchange, and thus "] and ]" transactions.


User-owned and directed, it automates, centralizes, standardizes, and streamlines processes that are critical to the safety and soundness of the world’s ]s. Through its subsidiaries, DTCC provides clearance, settlement, and information services for equities, corporate and municipal ], unit investment trusts, government and mortgage-backed securities, money market instruments, and over-the-counter ]s. DTCC is also a leading processor of ]s and insurance transactions, linking funds and carriers with their distribution networks. DTCC's DTC depository provides ] and asset servicing for 2.8 million securities issues from the United States and 100 other countries and territories, valued at $36 trillion, more than any other depository in the world. User-owned and directed, it automates, centralizes, standardizes, and streamlines processes that are critical to the safety and soundness of the world’s ]s. Through its subsidiaries, DTCC provides clearance, settlement, and information services for equities, corporate and municipal ], unit investment trusts, government and mortgage-backed securities, money market instruments, and over-the-counter ]s. DTCC is also a leading processor of ]s and insurance transactions, linking funds and carriers with their distribution networks. DTCC's DTC depository provides ] and asset servicing for 2.8 million securities issues from the United States and 100 other countries and territories, valued at $36 trillion, more than any other depository in the world.


In 2006, DTCC settled the vast majority of securities transaction in the ], more than $1.5 quadrillion in value. DTCC has operating facilities in New York City and at multiple locations in and outside the U.S. DTCC's derivatives services are offered through DTCC Deriv/SERV LLC, a subsidiary of DTCC. In 2006, DTCC settled the vast majority of securities transaction in the ], more than $1.5 quadrillion in value. DTCC has operating facilities in New York City and at multiple locations in and outside the U.S. DTCC's derivatives services are offered through DTCC Deriv/SERV LLC, a subsidiary of DTCC.


==History== ==History==


Established in 1972, ''']''' (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 of the U.S. securities industry in the late ]. The increase in volume made the exchange of physical ]s more difficult, less efficient, and increasingly expensive. The goal of DTC was to automate this process by retaining paper certificates in one place, and keeping electronic records. Established in 1972, ''']''' (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 of the U.S. securities industry in the late ]. The increase in volume made the exchange of physical ]s more difficult, less efficient, and increasingly expensive. The goal of DTC was to automate this process by retaining paper certificates in one place, and keeping electronic records.


Two methods were devised to solve the crisis: Two methods were devised to solve the crisis:


The first was to hold all stock certificates in a centralized location and record all changes of ownership electronically - this method led to the creation of DTC in ] (stocks held by DTC are kept in the name of its ] nominee, Cede & Co.). The primary function of the DTC system is to provide centralized clearing and settlement of security transactions electronically. Not all securities are eligible to be settled through DTC ("DTC-eligible"). The first was to hold all stock certificates in a centralized location and record all changes of ownership electronically - this method led to the creation of DTC in ] (stocks held by DTC are kept in the name of its ] nominee, Cede & Co.). The primary function of the DTC system is to provide centralized clearing and settlement of security transactions electronically. Not all securities are eligible to be settled through DTC ("DTC-eligible").


The second method involves '']''; and led to the formation of the '''National Securities Clearing Corporation''' (NSCC) in ]. The second method involves '']''; and led to the formation of the '''National Securities Clearing Corporation''' (NSCC) in ].


Before DTC and NSCC were formed, ] physically exchanged certificates, employing hundreds of messengers to carry certificates and checks. With volumes approaching 10 to 12 million shares a day, the paperwork burden became enormous. To deal with this large volume, the exchanges were forced to close every week (they chose every Wednesday), and trading hours were shortened other days of the week. Before DTC and NSCC were formed, ] physically exchanged certificates, employing hundreds of messengers to carry certificates and checks. With volumes approaching 10 to 12 million shares a day, the paperwork burden became enormous. To deal with this large volume, the exchanges were forced to close every week (they chose every Wednesday), and trading hours were shortened other days of the week.


This continuing growth in securities trading led the ] to establish the Central Certificate Service (CCS) in ]. The CCS kept track of the total number of shares held by NYSE members. This led to the development of the Banking and Securities Industry Committee (BASIC), and finally the development of DTC. This continuing growth in securities trading led the ] to establish the Central Certificate Service (CCS) in ]. The CCS kept track of the total number of shares held by NYSE members. This led to the development of the Banking and Securities Industry Committee (BASIC), and finally the development of DTC.


DTCC has become involved in the controversy involving ].<ref>], July 5, 2007]</ref><ref></ref> Ten suits alleging naked short-selling filed against the DTCC were withdrawn or dismissed by May 2005.<ref> Depository Trust Clearing Corporation, May 2005. Accessed February 5, 2007</ref> DTCC has become involved in the controversy involving ].<ref>], July 5, 2007]</ref><ref></ref> Ten suits alleging naked short-selling filed against the DTCC were withdrawn or dismissed by May 2005.<ref> Depository Trust Clearing Corporation, May 2005. Accessed February 5, 2007</ref>
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* ] – Provides clearing for ], such as ] * ] – Provides clearing for ], such as ]
* ] – Provides clearing on European exchanges * ] – Provides clearing on European exchanges
* ] – Partnership with ] that provides that provides clearing automation solutions * ] – Partnership with ] that provides clearing automation solutions


==References == ==References ==
<references/> <references/>



==External links== ==External links==
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* *
* *



] ]

Revision as of 11:45, 22 September 2007

The Depository Trust & Clearing Corporation (DTCC), based primarily at 55 Water Street in New York City, is the world’s largest post-trade infrastructure organization. It was set up to provide an efficient and safe way for buyers and sellers of securities to make their exchange, and thus "clear and settle" transactions.

User-owned and directed, it automates, centralizes, standardizes, and streamlines processes that are critical to the safety and soundness of the world’s capital markets. 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. DTCC is also a leading processor of mutual funds and insurance transactions, linking funds and carriers with their distribution networks. DTCC's DTC depository provides custody and asset servicing for 2.8 million securities issues from the United States and 100 other countries and territories, valued at $36 trillion, more than any other depository in the world.

In 2006, DTCC settled the vast majority of securities transaction in the United States, more than $1.5 quadrillion in value. DTCC has operating facilities in New York City and at multiple locations in and outside the U.S. DTCC's derivatives services are offered through DTCC Deriv/SERV LLC, a subsidiary of DTCC.

History

Established in 1972, 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 of the U.S. securities industry in the late 1960s. The increase in volume made the exchange of physical stock certificates more difficult, less efficient, and increasingly expensive. The goal of DTC was to automate this process by retaining paper certificates in one place, and keeping electronic records.

Two methods were devised to solve the crisis:

The first was to hold all stock certificates in a centralized location and record all changes of ownership electronically - this method led to the creation of DTC in 1973 (stocks held by DTC are kept in the name of its partnership nominee, Cede & Co.). The primary function of the DTC system is to provide centralized clearing and settlement of security transactions electronically. Not all securities are eligible to be settled through DTC ("DTC-eligible").

The second method involves multilateral netting; and led to the formation of the National Securities Clearing Corporation (NSCC) in 1975.

Before DTC and NSCC were formed, brokers physically exchanged certificates, employing hundreds of messengers to carry certificates and checks. With volumes approaching 10 to 12 million shares a day, the paperwork burden became enormous. To deal with this large volume, the exchanges were forced to close every week (they chose every Wednesday), and trading hours were shortened other days of the week.

This continuing growth in securities trading led the New York Stock Exchange to establish the Central Certificate Service (CCS) in 1968. The CCS kept track of the total number of shares held by NYSE members. This led to the development of the Banking and Securities Industry Committee (BASIC), and finally the development of DTC.

DTCC has become involved in the controversy involving naked short selling. Ten suits alleging naked short-selling filed against the DTCC were withdrawn or dismissed by May 2005.

Subsidiaries

The DTCC has several subsidiaries:

References

  1. "Blame the 'Stock Vault'?" The Wall Street Journal, July 5, 2007
  2. DTCC response to Wall Street Journal Article, July 6, 2007
  3. "Nevada Court Dismisses Nanopierce Lawsuit Against DTCC On Naked Short Selling," Depository Trust Clearing Corporation, May 2005. Accessed February 5, 2007

External links

Categories: