DTCC Connection

Nov 06, 2017 • DTCC Connection

How does a market stress event or high-volume trading day impact DTCC systems?

Joseph Cuniglio, Director, NSCC Operations

How does a market stress event or high-volume trading day impact DTCC systemsOne of the most important ways that DTCC provides stability to the marketplace is by ensuring our systems have the capacity to seamlessly handle daily trading volumes, particularly during periods of peak activity or market stresses when the number of trades flowing through our processing engines can spike dramatically. On average, we process around 100 million transactions each day, but we also need to be prepared to handle many multiples of that when markets are at their most volatile. Our record is 315 million transactions in a single day, which occurred in October 2008 at the height of the financial crisis.

It takes a lot of planning, preparation and constant vigilance to make sure we can provide this type of stability during times of crisis. For example, our IT and Settlement Application teams monitor capacity thresholds throughout the day and, if necessary, they can quickly rebalance the processing load across multiple servers to accommodate activity in the marketplace. This work is critical to managing potential volume spikes so that we can continue to seamlessly process transactions for our clients. In addition, our systems are architected to make them highly resilient to systemic shocks, and thanks to our redundant global network we can continue to operate efficiently when markets become volatile. The ability to shift our workforce during stress events is an equally critical element of our coverage model.

There’s no better example of this than during Superstorm Sandy, which devastated many parts of the northeast and forced us to evacuate our headquarters in the heart of the financial district in New York City. With virtually all activities shut down in the region, we implemented our business continuity plan well in advance of the storm’s landfall, shifting virtually all operations to our facility in Tampa. Even as the markets reacted to the storm, we maintained full operational processing capability – and we never missed a beat. We’ve done this many times in our past so it’s very natural for us to quickly anticipate and proactively manage these types of events to protect the stability and integrity of the financial system.

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