Issues & Initiatives

Settlement Matching

The Depository Trust & Clearing Corporation (DTCC), through its subsidiary, The Depository Trust Company (DTC), will institute Settlement Matching for DTCC Participants beginning in 2013, bringing significant enhancements to the settlement process and further reducing risk for DTC and its Participants.

Settlement Matching will be introduced in a manner that promotes institutional trade affirmation and encourages straight-through processing (STP) by implementing a transaction matching component into DTCC’s existing settlement processes. DTCC will leverage existing infrastructure to provide clients with the ability to “authorize or match” transactions prior to settlement. This will eliminate the need for reclamation transactions and the accompanying credit and liquidity risk, a significant step in risk mitigation for the industry.

In addition to the inherent credit and liquidity risks, a number of other drawbacks come with the current settlement process including the inability to credit underlying customer accounts without risk of reversal, limited transparency of erroneous or disputed transactions, and costly manual intervention. Also, most reclaims are processed primarily late in the day making it difficult for the original deliverer to take corrective action or use the securities for other funding opportunities.


Settlement Matching will bring benefits to the U.S. market, including:

  • Enhanced intraday settlement finality through the elimination of reclaim processing
  • Improved straight-through processing capabilities
  • Promotion of “best practices” for institutional trade matching, and
  • Better positioning the industry for a shortened settlement cycle.

The Settlement Matching initiative follows on DTCC’s recent efforts to further reduce systemic risk and its heightened focus on risk management. It also aligns DTCC with the intraday settlement finality recommendations of the Committee on Payment and Settlement Systems of the International Organization of Securities Commission, collectively known as CPSS-IOSCO.

For more information on Settlement Matching: please contact your Relationship Manager or Jack Manuel, DTCC Director, Settlement Product Management at or (212) 855-5921.

Settlement Matching Timeline:
Stage 1 - Reducing DTCC’s RAD Default Limits in Half: Implemented July 26,2013.
Stage 2 – Stock Lending profiles: Implemented October 25, 2013.
Stage 3 – Reducing DTCC’s RAD Default Limits to Zero: Implemented as follows;

Date Transaction Type Old Threshold New Threshold
7/11/2014 Payment Orders $500,000 $0
Deliver Orders $7,500,000 $100,000
7/25/2014 Deliver Orders $100,000 $20,000
08/22/2014 Deliver Orders $20,000 $0.01

Stage 4 – Subjecting Institutional Deliveries (ID) to Receiver Approval: Implementation schedule as follows;

  • January 30, 2015: Clients will be able to view and modify their ID Trades profile setting prior to them becoming effective on February 5th.
  • February 5, 2015: DTCC’s RAD default limit for ID receives will be set to $15 million.
  • February 12,2015: DTCC’s RAD default limit for ID receives will be set to $25,000.
  • February 26, 2015: DTCC’s RAD default limit for ID receives will be set to $0.01.


Update to DTCC's Settlement Matching Initiative

Christopher Nolan, DTCC Product Manager, Settlement Services provides an update to DTCC’s Settlement Matching Initiative. The initiative represents a major change to the U.S. settlement process which fundamentally alters the way securities transactions in equities, corporate debt and municipal debt securities are settled in the U.S. DTCC’s settlement matching initiative will not only enhance intraday settlement finality, but it will substantially reduce systemic credit and liquidity risk for our clients by eliminating transactions that can override DTC’s risk management controls.

DTCC Unveils Strategic Blueprint to Strengthen Settlement Finality in U.S. Markets

DTCC Unveils Strategic Blueprint to Strengthen Settlement Finality in U.S. Markets

DTCC has proposed major structural changes in the settlement of equities, corporate debt and municipal debt securities as well as changes in the settlement of money market instruments (MMIs) to reduce risk and strengthen intraday settlement finality in the U.S. financial markets.

Technical Specs

Participants are advised to verify that each of the current filler spaces being modified as part of this initiative do not drive any internal programming as these fields will be repurposed to accommodate new data. Participants may complete coding changes in advance of each implementation stage but should not expect values in these fields until the applicable implementation.