Europe's Markets: Clearing and Settlement of Equity Trades

DTCC's European Central Counterparty Limited (EuroCCP) is a UK-registered and regulated company providing clearing and settlement services to European trading venues. EuroCCP clears trades in 19 markets, including more than 6,000 equities issues in Europe, US issues, and 120 listed Depositary Receipts through Euroclear. EuroCCP's coverage will exceed 20 markets in Europe as it expands to meet the needs of pan-European trading platforms. Participants in EuroCCP realize savings through cross-platform netting and margining, as well as very low costs that result from leveraging the economies of scale of DTCC. EuroCCP is supported by the many decades of central counterparty know-how and experience of DTCC. For more information, visit EuroCCP's web site.

Global Markets: Over-The-Counter Derivatives

With a customer base of more than 1,100 dealers and buy-side firms in 31 countries, DTCC's over-the-counter (OTC) derivatives business has the world's largest community of users of automated post-trade processing services for OTC credit, interest rate and equity derivatives transactions.

Working with market participants and the International Swaps and Derivatives Association (ISDA®), DTCC in late 2003 launched its OTC derivatives business. Its first product was the automated matching and confirmation of single-name credit default swaps (CDS). The system has expanded coverage to dozens of credit derivative types, including indices, tranches and specialized CDS. Today an estimated 90% of CDS traded globally are matched and confirmed on DTCC's platform, and an increasing number of OTC equity and interest rate derivatives are also matched and confirmed on the DTCC system.

In late 2006, DTCC introduced the Trade Information Warehouse, the market's first and only comprehensive trade database and centralized electronic infrastructure for post-trade processing of OTC derivatives contracts over their lifecycles, from confirmation through to final settlement. DTCC's Trade Information Warehouse provides repository services and associated automated processing services for OTC credit derivatives. DTCC's joint venture with Markit, MarkitSERV, provides a single portal for OTC derivatives matching and confirmation. For more information, visit OTC Derivatives.

International Custody and Asset Servicing

DTCC is aggressively globalizing its service offerings. The Depository Trust Company, DTCC's depository, held almost $34 trillion in securities from 120 countries in custody as of the end of 2009. For more information, visit Asset Services.

Global Corporate Actions

The Global Corporate Actions Validation Service (GCA VS) provides a centralized source of “scrubbed” corporate action announcement information, on global securities, that firms can use for both their front- and back-offices. In 2007, GCA VS provided 1 million unique corporate action announcements (mandatory and voluntary) and 3 million “scheduled payments” against nearly 2 million equities, fixed income and structured securities across more than 160 countries/territories. The service has regional presence in New York, London and Shanghai, works in 16 languages, and operates round-the-clock. For more information, visit GCA.

Global Links and Relationships

DTCC has a range of links and relationships with central securities depositories (CSDs) and central counterparties (CCPs) worldwide, and actively participates in several global industry organizations, including the Americas CSD Association (ACSDA), CCP12 and the International Securities Services Association (ISSA), among many others.

• On August 25, 2010, DTCC and The Depósito Central de Valores, S.A. (DCV) of Chile signed an agreement that recognizes and strengthens their relationship and will serve as a basis for future collaboration.
• Currently, 14 non-U.S. depositories maintain accounts at DTC to support DTC-eligible issues for their members. DTC also operates accounts at three other depositories supporting non-U.S. issues for DTC participants. DTC has an account at the Canadian Depository for Securities Ltd. that enables DTC to settle transactions in eligible Canadian issues in Canadian dollars on behalf of its participants.
• DTCC also is expanding its relationships with major post-trade infrastructure organizations in Brazil, China, Japan, Korea, India, Pakistan, and Taiwan, signing Memoranda of Understanding (MOUs) that aim to expand cooperation and information sharing. Ultimately, these agreements pave the way for creating new ways of working globally, which benefits investors around the world.

International Reach for Mutual Funds/Investment Funds

DTCC's Mutual Fund Services provide automated electronic transfer of information and money, not just for U.S. mutual funds, but also for a growing number of cross-border investment funds.

These cross-border investment funds are efficiently processed for a growing number of DTCC's customers, since they can use the entire range of DTCC's mutual fund services to provide an automated way to purchase, exchange or redeem such funds at a cost well below those of other funds. For more information, visit Wealth Management Services.

Alternative Investment Products

DTCC has created a technology solution for the alternatives market through its subsidiary, NSCC, with active participation and input from broker dealers, alternative investment companies and their administrators.

DTCC's Alternative Investment Product (AIP) suite of services is a platform that links global market participants — including broker-dealers, fund managers, administrators and custodians — and provides end-to-end processing of alternative investments such as hedge funds, funds of funds, private equity, real estate investment trusts and limited partnerships. A growing number of asset managers are manufacturing and distributing alternative investment products because they facilitate creative investment strategies that appeal to investors and institutional clients seeking higher investment returns. Global hedge fund assets alone have grown to $2.4 trillion in 2007 and are projected to reach $4 trillion by 2010. REIT assets, at $438 billion, have almost tripled in just five years. For more information, visit Wealth Management Services.

Syndicated Loan Services

One of DTCC's newest international product lines will support the syndicated loan market. Syndicated loans are complex structures involving multiple lenders for each borrower, with an agent bank acting as the liaison, transmitting information back and forth between parties. The primary loan transactions can be made in multiple currencies, may include a combination of term and revolving loans, and are routinely traded in the secondary market.

According to industry estimates, global syndicated lending reached US$4.5 trillion in 2007, up 13.4% from 2006 and a 32% increase over 2005.

DTCC, through its Loan/SERV suite of services, continues to build and expand the global infrastructure needed to support the syndicated loan market. DTCC's Loan/SERV Reconciliation Service allows for the reconciliation of more than 79,000 global lender positions daily between agents and lenders around the globe. DTCC's Loan/SERV Messaging Service provides a safe, secure, instant and automated network for the transmission, receipt and online storage of industry standard loan messages. Services will be available both in the US and Europe. For more information, visit Loan/SERV.

Omgeo: Tool for Global Institutional Trading

Omgeo, DTCC's joint venture with Thomson Reuters, creates certainty in post-trade operations through the automation and timely confirmation of the economic details of trades executed between investment managers and broker dealers. Omgeo enables an efficient community of more than 6,000 financial services clients, including nearly 200 hedge funds, in 45 countries to manage matching and exception handling of trade allocations, confirmations and settlement instructions. For more information, visit Omgeo's web site.

Understanding and Using International Standards

Increasingly, DTCC's services are using international standards and messaging at multiple data centers and operations facilities to process trading and service assets through a growing network that operates around the world and around the clock. DTCC sees the need to support an increasingly global trading environment at optimal efficiency and low cost in order to lower the costs for investors everywhere.

This means the adoption of ISO standards where appropriate, as well as use of existing secure networks such as SWIFTNet along with DTCC's proprietary SMART network, to allow customer firms to quickly and easily connect to DTCC. DTCC is also making extensive use of the Internet and a Web-based browser, securing and controlling access through the use of digital certificates issued by DTCC.