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The main functions of the Depository Trust Corporation is to clear and settle stock, bond and money market trades and to provide custody of securities in a cost-effective and automated environment. It is the job of the DTC to provide an efficient and safe way for the buyer and seller of securities to make their exchange and thus "clear and settle" a transaction.
History
http://www.dtcc.com/Careers/history.htm
Established in 1973, the Depository Trust Corporation was created to alleviate volumes of paperwork and lack of security that developed after large growth in the U.S. securities industry in the late 60s. The increase in volume made the exchange of physical stock certificates more difficult, and less efficient.
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 lead to the creation of DTC in 1973. The second method involved “multilateral netting” and led to the formation of the NSCC in 1975.
When then DTC and NSCC were first developed, brokers physically exchanged certificates employing hundreds of messengers to carry certificates and checks for each trade made. With volumes approaching 10 to 12 million shares a day, the paperwork became enormous; to deal with the new volume the exchanges closed every Wednesday and trading hours were shortened trading hours other days of the week.
This increased volume caused the New York Stock Exchange to established the Central Certificate Service (CCS) in 1968. The CSS kept track of total number of shares held by NYSE-members. This led to the development of the Banking and Secuities Industry Committee, and finally the development of DTC.