Compliance at DTCC
Code of Conduct
For DTCC's Code of Conduct please refer here
Anti-Money Laundering
DTCC is firmly committed to preserving the safety and soundness of its operations and protecting its reputation in the global financial community. DTCC also acknowledges its important role in furthering efforts to combat money laundering and terrorist financing. In compliance with applicable provisions of the Bank Secrecy Act (BSA) and global requirements, DTCC has established standards that include:
- Written Anti-Money Laundering (AML) policies and procedures;
- Observance of a Know Your Customer Program;
- Operating procedures reasonably designed to meet AML and Global Sanctions screening responsibilities;
- Investigating and appropriate reporting of suspicious activity;
- Training; and
- Independent testing
Further details about DTCC’s compliance with these requirements are provided via the Wolfsberg Anti-Money Laundering Questionnaire:
DTCC STATEMENT ON THE CESSATION OF LIBOR
The UK Financial Conduct Authority (FCA) has reaffirmed central assumption that firms cannot rely on LIBOR being published after the end of 2021. At that point, all firms should be prepared for LIBOR to be unusable, and market participants are strongly encouraged to transition to other risk-free rates.
DTCC has been involved with the U.S. Federal Reserve Bank's Alternative Reference Rates Committee (ARRC) since the creation of a secured overnight financing rate (“SOFR”) and participates with the Operational Working Group and its sub-groups. SOFR is a benchmark interest rate for dollar-denominated derivatives and loans that is expected to replace London inter-bank offered rate (LIBOR).
DTCC has reviewed the impact of the cessation of LIBOR on its businesses. While there is an impact to the transactions that are processed through DTCC businesses, there is no impact on DTCC operations. Below provides an overview of DTCC’s review:
DTCC SIFMU Businesses:
- NSCC - Does not utilize LIBOR (or other IBOR) benchmark rates for the purposes of trade input or processing.
- FICC - Does not utilize LIBOR (or other IBOR) benchmark rates for the purposes of trade input or processing.
- DTC - Does not utilize LIBOR (or other IBOR) benchmark rates for the purposes of trade input or processing. For corporate action events, agents of securities issuers provide DTC with the numerical rate to be paid out to the holders of record. The derivation of the rate and its underlying benchmark, if applicable, are not functions provided by DTC.
DTCC Solutions Businesses:
DTCC has completed its internal review of potential impact, and has determined there are very limited areas, relationships and touchpoints. DTCC does not consume the LIBOR index, nor does it create calculations based on LIBOR.
- RDS: Trade repositories – DTCC operates Global Trade Repository (GTR) services through a number of licensed or registered trade repositories in various jurisdictions. Certain transactions required to be reported through trade repositories may contain the underlying reference rate (IBOR or RFR). It is the role of the reporting parties and their agents to determine if the submitted positions need to be amended for any IBOR transition and to take the necessary steps to amend or modify the reported positions. The GTR will not be doing any updating of data. There are several industry working groups that are discussing these issues with participants and regulators, and GTR is participating in these working groups as appropriate.
- Trade Information Warehouse (TIW): DTCC’s TIW provides post-trade processing for credit derivatives that have been electronically confirmed or cleared. None of these transactions reference IBORs and there is no implication to the TIW.
- ITP: Reference rates are utilized as information submitted for repo transactions to CTM and TradeSuite. The new RFRs have been added. There is no expectation that there will be any necessary amendments to legacy transactions. There is no impact to OASYS, GMEI or ALERT.
COMPLIANCE REQUIREMENTS FOR DTCC CLIENTS
OFAC Certifications
Certain Members and Participants that are subject to the jurisdiction of the United States under Office of Foreign Assets Control (“OFAC”) regulations are required to provide DTCC with a “Confirmation of an OFAC Program” (“OFAC Confirmation”) every two years. These would include U.S. Participants and Pledgees of The Depository Trust Company (“DTC”), U.S. Members and Limited Members of the National Securities Clearing Corporation (“NSCC”), U.S. Members of Government Securities Division, and U.S. Participants of Mortgage-Backed Securities Division of the Fixed Income Clearing Corporation (“FICC”).
The OFAC Confirmation is intended to provide evidence that the U.S. Member or Participant (i) has the primary relationship with the clients for whom it is conducting activity through DTC, NSCC, or FICC; and (ii) has implemented a risk-based program reasonably designed to comply with applicable OFAC sanctions and regulations.
The OFAC Compliance Officer, Chief Compliance Officer or other individual with responsibility for managing the OFAC compliance program for U.S. Members and Participants must renew their OFAC Confirmation on or prior to the expiration date.
Members and Limited Members that fail to provide the electronic confirmation of an OFAC Program on or before the expiration date will be subject to a $5,000 fine.
The Self-Service Customer Confirmation (OFAC Web Confirmation) web application (accessible via the DTCC Portal provided by Relationship Management) allows U.S. Members and Participants to renew their confirmations electronically rather than by submitting a hard copy confirmation. The Self-Service Customer Confirmation (also allows U.S. Members and Participants to provide their confirmation for one or more legal entities in one submission, view the history of submissions, and read and print a copy of the executed confirmation. Only the designated OFAC Compliance Officer or designee for the U.S. Member or Participant may renew the confirmation in the OFAC Confirmation web application. The Access Coordinator for the U.S. Member or Participant may register the OFAC Compliance Officer for the application.
Members and Participants that do not have an Access Coordinator should contact their Relationship Manager.
For questions on the Rule requiring confirmation of an OFAC Program, call the DTCC Compliance Hotline at 212-855-8030.
For more information please refer to the following:
KYC Requirements
DTCC is firmly committed to preserving the safety and soundness of its operations and protecting its reputation in the global financial community. DTCC also acknowledges its important role in furthering efforts to combat money laundering and terrorist financing. In support of these efforts, and in compliance with legal and regulatory obligations, DTCC has established a KYC Program.
The primary objective of DTCC’s KYC Program is to provide a risk-based approach for the collection of sufficient information and documentation to know its customers and the customers of its subsidiaries, as required by U.S. and international AML regulations. The DTCC KYC Program includes the implementation of a Customer Identification Program (“CIP”), conducting Customer Due Diligence (“CDD”), and Enhanced Due Diligence (“EDD”), when necessary (collectively referred to as Know Your Customer or (“KYC”)). The collection of KYC information and documentation is intended to identify and mitigate Anti-Money Laundering (“AML”) risk posed by entities applying to be customers and existing customers of DTCC to help facilitate the detection and identification of unusual or potentially suspicious activity. In order to accurately assess the AML risks posed by existing clients of DTCC, DTCC also conducts ongoing KYC reviews.
Applicants to DTCC’s subsidiaries are requested to provide the necessary KYC information during the onboarding process. This information is periodically refreshed using a process that may involve reaching out to existing clients, via email, to confirm existing data or provide necessary updates. Existing Members and Participants are required to inform DTCC, in a timely manner, of business changes, which include changes to a Member or Participant organization’s structure, ownership, or control persons.
Fines & Waivers
Rules for Participants and Members at the various DTCC clearing agencies are set forth in the following documents:
In compliance with the disciplinary requirements of Section 17A (b) (3) (G) of the Securities Exchange Act of 1934, as amended; the notice requirements of 12 C.F.R. § 208.32; as well as the Clearing Agency Rules and Trade Repository Rulebooks/Procedures defined in the listed documents above, violations of these rules may result in a Warning Notice or a fine. Notification in the form of a Warning Notice or Fine Letter will be sent to the Participant or Member, via email, within 10 business days of confirmation of the violation. Rule violations that may result in a fine include the following:
- Failure to settle on time
- Late acknowledgement of transactions and changes in positions
- Failure to provide required clearing funds in a time manner
- Failure of DTC Participants to complete monthly confirmation of positions on time
- Failure to provide financial reports in a timely manner
- Failure to provide timely notice regarding business and/or financial changes (including Statutory Disqualification)
- Failure to renew the Confirmation of an OFAC Program in a timely manner
- Failure to renew the confirmation of a cybersecurity program in a timely manner
As indicated in the Fine Notice, Participants and Members may contest a fine by requesting that it be waived or that a hearing be held. A request for a waiver must be made, in writing, within five business days of the date the Fine Letter was received. In the event that a Warning Notification or Fine Letter has been received, please refer to the contact information in the specific notification for questions or further details.
Slavery and Human Trafficking Statement
This statement is made on behalf of DTCC Derivatives Repository PLC (“DDRL”), DTCC Europe Limited (“DEL”) and The Depository Trust & Clearing Corporation
(“DTCC”), (together, the “Company”),1 pursuant to section 54 of the Modern Slavery Act 2015 (“Act”) in respect of
the steps taken to combat modern slavery and human trafficking occurring within supply chains in relation to the
financial year ended 31 December 2020.
COMPLIANCE INFORMATION FOR DTCC SERVICE PROVIDERS, PARTNERS, AND THIRD PARTIES
Company Profile
Our Regulators
DTCC’s subsidiaries are subject to supervision and oversight by a number of regulatory bodies. DTC, NSCC, and FICC were also designated by the Financial Stability Oversight Council (FSOC) as “systemically important financial market utilities” under Title VIII of Dodd-Frank in July 2012.
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U.S. Securities and Exchange Commission
- National Securities Clearing Corporation (NSCC)
- Fixed Income Clearing Corporation (FICC)
- The Depository Trust Company (DTC)
- DTCC ITP Matching (US) LLC
- DTCC Data Repository (U.S.) LLC
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Federal Reserve Bank of New York
- The Depository Trust Company (DTC)
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New York State Department of Financial Services
- The Depository Trust Company (DTC)
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Australian Securities and Investment Commission
- DTCC Data Repository (Singapore) PTE Ltd
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United Kingdom Financial Conduct Authority (FCA)
- DTCC Derivatives Repository PLC
- DTCC ITP (UK) Limited
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Autorité des marches financiers (Quebec)
- DTCC Data Repository (U.S.) LLC
- DTCC ITP Matching (US) LLC
- Fixed Income Clearing Corporation
- DTCC ITP Matching (Canada) Limited
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Ontario Securities Commission
- DTCC ITP Matching (Canada) Limited
- DTCC Data Repository (U.S.) LLC
- Fixed Income Clearing Corporation (FICC)
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U.S. Commodity Futures Trading Commission
- DTCC Data Repository (U.S.) LLC
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Japan Financial Services Agency (J-FSA)
- DTCC Data Repository (Japan) KK
- Fixed Income Clearing Corporation
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Monetary Authority of Singapore (MAS)
- DTCC Data Repository (Singapore) PTE Ltd.
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Bank of Japan
- DTCC Data Repository (Japan) KK
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European Securities and Markets Authority (ESMA)
- DTCC Data Repository Ireland
- National Securities Clearing Corporation
- Fixed Income Clearing Corporation
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Manitoba Securities Commission
- DTCC Data Repository (U.S.) LLC
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Alberta Securities Commission
- DTCC Data Repository (U.S.) LLC
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British Columbia Securities Commission
- DTCC Data Repository (U.S.) LLC
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Financial and Consumer Services Commission, New Brunswick
- DTCC Data Repository (U.S.) LLC
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Office of the Superintendent of Securities, Newfoundland and Labrador
- DTCC Data Repository (U.S.) LLC
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Nova Scotia Securities Commission
- DTCC Data Repository (U.S.) LLC
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Office of the Superintendent of Securities, Northwest Territories
- DTCC Data Repository (U.S.) LLC
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Office of the Superintendent of Securities, Nunavut
- DTCC Data Repository (U.S.) LLC
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Office of the Superintendent of Securities, Prince Edward Island
- DTCC Data Repository (U.S.) LLC
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Financial and Consumer Affairs Authority of Saskatchewan
- DTCC Data Repository (U.S.) LLC
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Office of the Yukon Superintendent of Securities
- DTCC Data Repository (U.S.) LLC
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Swiss Financial Market Supervisory Authority (FINMA)
- Fixed Income Clearing Corporation (FICC)
- DTCC Data Repository (Ireland) PLC
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Contact the Compliance Hotline: +1-212-855-8030 or [email protected]