This chart offers a high-level overview of the settlement process for DTCC subsidiaries, The Depository Trust Company (DTC) and the National Securities Clearing Corporation (NSCC). The graphic is interactive, enabling the user to obtain information on the various types of input that are settled through DTC, the processing involved and how the actual end-of-day settlement process works.

Settlement Process Overview

In the financial industry, settlement is generally the term applied to the exchange of payment to the seller and the transfer of securities to the buyer of a trade. It’s the final step in the lifecycle of a securities transaction.

The money movements of these transactions are recorded by NSCC. In most stock exchange transactions, the money is moved or “settled” three days after the actual purchase or sale is executed. The industry refers to this settlement cycle as “T+3.”

DTC is the central securities depository for equity securities, such as common stock, as well as municipal and corporate debt securities, including money market instruments. It's the central hub where all securities positions are held in the U.S. DTC processes other types of securities movements such as institutional deliveries, stock loans and financing transactions, including the pledging of securities to the Federal Reserve, commercial banks or the Options Clearing Corporation. These transactions are settled at DTC. DTC and NSCC transactions are settled collectively at the end of the day, combining the settlement balances a client has at both DTC and NSCC in to a single obligation.

Stage 1: input

Stage 1
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Stage 2: Processing

Stage 2
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stage 3: end of
day settlement

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NSCC

P&I ALLOCATIONS

DTC CLIENT INPUT

dtc pledge system

corporate and municipal new issuance

mmi issuances and maturities

omgeo id

ims
inventory
management system

atp
account transaction
processor

reintroduced drops

cns

spps

nscc
settlement

settlement
system

federal
reserve

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