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DTCC: EMCC Expands Range of Eligible Securities to Emerging Markets Corporate Debt Issues
New York, October 29, 2002 - Emerging Markets Clearing Corporation (EMCC) will begin processing corporate debt issues from more than 50 emerging markets, following approval last week by the U.S. Securities and Exchange Commission.
EMCC offers highly sophisticated trade comparison, netting, settlement processing and risk management systems that guarantee cross-border trades will be settled efficiently, accurately and cost effectively. EMCC already provides these services for Brady bonds and other sovereign and quasi-sovereign debt issues. This further expands EMCC's offerings to include emerging markets corporate debt that meets certain minimum criteria.
"From a risk management and operational standpoint, EMCC brings greater stability to the trading of emerging market debt and ensures orderly global settlement," said Paul Masco, managing director, Salomon Smith Barney Inc. "Adding corporate emerging markets debt will not only give us the benefit of a trade guarantee, but we'll also have greater operational efficiency for another class of emerging market debt instruments because the settlement process will be significantly streamlined."
"When EMCC was founded in 1998, we started with Brady bonds as the sole instrument class, becoming the first clearing corporation to guarantee cross-border trading activity," said Keith Kanaga, managing director, EMCC. "As we evolved, we included other sovereign debt, and quasi-sovereign debt issues from entities such as development banks and export-import banks. This addition is very much in line with our step-by-step expansion strategy, which we're executing with valuable input from our members."
EMCC manages the entire settlement process, relieving firms from having to issue settlement instructions to international securities depositories themselves. In addition, EMCC "pairs off" failed trades - a process in which failed trades in a given security essentially cancel one another out - and this generates considerable time and cost savings for EMCC members.
About EMCC:The Emerging Markets Clearing Corporation (EMCC), a subsidiary of DTCC, provides automated trade comparison, settlement and risk management of transactions involving Brady bonds, sovereign debt, corporate debt, and related transactions in emerging-market economies. The first clearing corporation in the world to guarantee cross-border trading activity, EMCC currently clears trades of securities representing issues from more than 50 countries. For more information, check EMCC's Web site at www.e-m-c-c.com.
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.