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DTCC
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Regulators Approve NSCC, DTC Intgration
New York, September 13, 1999 - The Depository Trust & Clearing Corporation (DTCC), a new holding company that will integrate two key securities industry organizations, The Depository Trust Company (DTC) and National Securities Clearing Corporation (NSCC), has received all necessary regulatory approvals to begin operation.
According to DTC and NSCC officials, a formal offering to exchange current DTC and NSCC shares for shares in DTCC is currently being sent to the 130 shareholders of the two organizations. The exchange offer is expected to be completed by October 15, 1999.
Regulatory approval necessary for the integration was received from the Securities and Exchange Commission and the Banking Board of the State of New York. The proposed integration has also passed Hart-Scott-Rodino Anti-trust Improvements Act review by the Federal Trade Commission and the Department of Justice.
"We are delighted to have received all the necessary regulatory approvals as quickly as we did," said Jill M. Considine, designated CEO of DTCC. "We are hopeful of completing the exchange offer so that we can move forward to begin operations as DTCC."
Considine said the approvals, which came well before the anticipated year-end time frame, would allow the organization to get an earlier start dealing with critical administrative and financial reporting issues and support of current efforts on global straight through processing.
Under the terms of the exchange offer, DTC stockholders, who are major bank and broker/dealer participants of the organization, will be offered one share of DTCC common stock for every share of DTC stock they currently own. There are currently 18,500 shares of DTC stock outstanding. Beginning next year, rights to own DTCC common stock will be reallocated to all participants of both DTC and NSCC.
Since the NSCC shareholders, the New York Stock Exchange, Inc. and the National Association of Securities Dealers, Inc., had been permitted to appoint directors on NSCC's board, they will be offered preferred shares in DTCC in exchange for their NSCC stock. The NYSE will receive one share of DTCC Series A Preferred stock for each share of NSCC stock it owns, and the NASD will receive one share of DTCC Series B Preferred stock for each share of NSCC stock it owns. There are currently 20,000 shares of NSCC stock outstanding. The NYSE and NASD, as preferred shareholders, will each be entitled to select one director to the 27-member DTCC board. The DTCC common shareholders will elect the remaining directors. Both NSCC and DTC will continue to operate as separate subsidiaries of DTCC.
DTC and NSCC, after lengthy discussions with representatives of the financial industry, agreed to integrate their operations in March. A single slate of directors was selected in June to serve on the boards of DTC, NSCC and DTCC when it began operation. A single executive management team was named for DTCC this summer, and management discussions on combining the organizations have been on-going since the spring.
About DTCC: The Depository Trust & Clearing Corporation (DTCC), with operating facilities in multiple locations in the U.S. and overseas, is a holding company for six subsidiary businesses - a depository and five clearing corporations - as well as the co-owner with Thomson Financial of a global joint venture called Omgeo. Through its subsidiaries, DTCC provides clearance, settlement and information services for equities, corporate debt, municipal debt, government securities and mortgage-backed securities in the U.S., and emerging markets debt trades globally. It is also a leading clearinghouse for mutual funds and insurance products, linking funds and carriers with distribution networks. In addition, DTCC provides custody and asset servicing for more than two million securities from the U.S. and 84 other countries. For more information on DTCC, see www.dtcc.com.