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DTCC

Solving the Paperwork Crisis

DTCC

The Depository Trust Company (DTC) is created in 1973 in response to Wall Street's paperwork crisis, which is brought on by the sharp increases in securities trading and the growing number of trades failing to settle. DTC begins streamlining Wall Street's clerical workload by immobilizing and holding securities certificates in custody and introducing its Institutional Delivery, or ID, system to automate institutional confirmations and link those to automated settlement.

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DTCC

Unifying Settlement

DTCC

In 1976, National Securities Clearing Corporation (NSCC) is created through the merger of the NYSE / AMEX Stock Clearing Corporation and NASDAQ National Clearing Corporation, achieving a single New York settlement system, achieving a single New York settlement system for NYSE, Amex, Nasdaq and the over-the-counter equity markets.

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DTCC

Decades of Trusted Leadership

DTCC

Across four decades, each Chairman and CEO helps shape the organization to meet the needs of an evolving marketplace and leaves an indelible impression that positions DTCC for continued excellence and growth.

Photos: William T. Dentzer, Jr.: first DTC Chairman and CEO 1973-1994. Jack Nelson: first NSCC President 1976-1983. William F. Jaenike: DTC Chairman and CEO 1994-1999. David M. Kelly: NSCC CEO 1983-1999. Jill M. Considine: first Chairman and CEO of DTCC 1999-2006. Donald F. Donahue: President and CEO 2006-2012 and Chairman 2006-2010. Robert Druskin: first DTCC Executive Chairman 2010-present. Michael C. Bodson: DTCC President and CEO 2012-present.

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DTCC

The Netting Solution

DTCC

NSCC leverages SIAC's development to introduce Continuous Net Settlement (CNS) - an automated system that plays a central role in reducing the total number of trade obligations requiring financial settlement. This represents a huge leap forward in delivering market efficiency as between 97% and 99% of all trade obligations are netted and do not require the exchange of money.

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DTCC

Extending Services and Eligibility

DTCC

DTC extends its reach by introducing new services to meet the growing needs of the marketplace, including automating and centralizing the processing of dividends and corporate actions as well as providing a range of new offerings for equities and debt. In 1975, ADRs become DTC-eligible, opening the door for these bank -issued depositary shares of international companies to clear and settle at NSCC and DTC. In future years, global shares are made DTC-eligible.

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DTCC

Links Across Borders

DTCC

In 1979, the Canadian Depository for Securities (CDS) joins DTC, setting the stage for NSCC, DTC and CDS in 1984 to establish their first cross-border clearing, settlement and asset servicing link, which remains the most trafficked cross-border link in the world. In the following years, the company forges links with market infrastructures in Europe, Asia, Latin America and the Middle East.

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DTCC

Tackling the MBS Market

DTCC

In 1979, MBSCC is created to address growing risks in the U.S. government agency mortgage-backed securities market, delivering greater efficiency, certainty and reliability to the marketplace.

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DTCC

Muni Bond Breakthrough

DTCC

In 1981, DTC begins to transform processing in the muni bond market with a groundbreaking program that demonstrates the power of book-entry processing and netting. In 1982, the first paperless muni bond is issued within DTC. In the following years, the company rapidly extends automation for these instruments.

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DTCC

A Bigger Vault

DTCC

The company expands its vault operations to house - and immobilize - a fast-growing inventory of the nation's securities certificates, driven in large part by munis. Volume peaks at more than 30 million securities certificates in 1990.

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DTCC

FASTer, Better

DTCC

DTC's coordination with issuers' transfer agents deepens through a program called FAST, in which agents provide DTC's sub-custody support for most issues. Over time, the FAST program significantly evolves to include the Direct Registration System.

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DTCC

Regional Consolidation

DTCC

In the 1980s, the U.S. markets begin to reap the benefits of economies of scale as the consolidation of U.S. regional clearing and depository services begins under DTC and NSCC, starting with the Boston Stock Exchange (1982), the Pacific Stock Exchange (1987), the Chicago Stock Exchange (1995) and culminating with the Philadelphia Stock Exchange (1997).

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DTCC

Happier Investors

DTCC

In 1985, NSCC addresses investors' single most frequent complaint to regulators and consumer watchdogs by launching ACATS, which automates the customer account transfer process.

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DTCC

Mutual Funds Take Off

DTCC

In 1986, NSCC tackles another industry segment, creating Fund/SERV, which delivers efficiencies that enable explosive growth in the mutual funds industry. The 1988 launch of Networking further reduces risk by allowing the exchange of customer account information between funds and brokers. In the following years, the company rolls out successive innovations to strengthen this booming market.

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DTCC

Hello Guvvies

DTCC

In 1986, GSCC is created, revolutionizing processing in the U.S. government securities market by automating trade comparison and netting. In 1989, GSCC introduces a full CCP settlement guarantee and netting system, bringing guaranteed settlement to all U.S. Treasury securities.

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DTCC

Same-Day Breakthrough

DTCC

In 1987, DTC receives Fed approval to adopt Same-Day Funds Settlement, allowing trades in certain asset classes to settle in same-day funds. In the 1990s the company moves to same-day settlement for all securities, one of the largest projects undertaken until then, achieving an industry goal and marking another leap in reducing risk for the industry.

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DTCC

Black Monday

DTCC

October 19, 1987. Stock markets around the world crash and the Dow loses 23% of its value. NSCC clears and settles record volumes, ensuring processing stability amid the market turmoil. Less than two years later, in 1989, NSCC takes a major leap to reduce risk in U.S. equity markets by accelerating its trade guarantee from T+4 to midnight of T+1.

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DTCC

CPs Go Paperless

DTCC

In 1990, a revolution begins in the commercial paper market: DTC begins fully dematerialized settlement for this fast-growing market with the first paperless CP issue by Westinghouse. Today, the company processes all U.S. commercial paper transactions.

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DTCC

ETFs into the Fold

DTCC

In 1993, the company brings another asset class under its umbrella as DTC begins making exchange-traded funds, or ETFs, eligible, and NSCC starts integrating ETF creations and redemptions into its CNS system.

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DTCC

Taking the Industry to T+3

DTCC

In 1995, NSCC and DTC lead the industry in moving the U.S. equity settlement cycle from T+5 to T+3 in a seamless transition that dramatically reduces risk and makes T+3 the standard in the U.S. equity markets.

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DTCC

Globalizing the Footprint

DTCC

In 1995, the company begins to expand beyond the U.S., opening a London office, its first outside the U.S. Today, DTCC has 14 offices globally.

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DTCC

Automating Insurance Products

DTCC

In 1997, NSCC automates another industry segment with the creation of the Insurance Services business, bringing operational and cost efficiencies to the processing of annuities. In the following years, the company explores opportunities to leverage its technology to automate the life insurance segment and delivers a suite of processing and compliance-driven solutions.

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DTCC

DTC + NSCC = DTCC

DTCC

In 1999, DTC and NSCC are brought under a new holding company, The Depository Trust & Clearing Corporation, or DTCC, bringing together the two companies to meet the industry's needs for greater operational efficiency, lower costs and more robust risk management in the new century.

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DTCC

An Uneventful Y2K

DTCC

DTCC greets the new millennium without a hitch, as years of Y2K preparations and collaboration with the industry pay off: the company's systems make a secure, smooth transition to post-trade processing in the year 2000.

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DTCC

AAA x 3

DTCC

For the first time, DTC and NSCC receive Standard & Poor's highest credit rating, AAA, in 2001 in recognition of their strong financial safeguards and robust risk management. The company's FICC subsidiary, created in 2003, receives the same rating in 2005. The three subsidiaries go on to maintain the highest rating for more than a decade even as the economic climate shifts from periods of prosperity to unprecedented crisis.

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DTCC

9/11

DTCC

On September 11, 2001, DTCC plays a vital role in helping to maintain liquidity and confidence in the U.S. financial markets, remaining fully operational and shifting personnel to an alternative site. Despite the lockdown in virtually all Lower Manhattan, the company settles $280 billion in trades on 9/11 and $1.8 trillion by the end of that week, helping to ensure the markets reopen the following Monday, September 17.

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DTCC

The Omgeo JV

DTCC

In 2001, DTCC forges its first joint venture and expands its global footprint with the creation of Omgeo, merging DTC's TradeSuite with the post-trade services of Thomson Financial, which today serves 6,500 clients in 52 countries.

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DTCC

FICC Makes Three

DTCC

In 2002, GSCC and MBSCC come together under the DTCC holding umbrella, merging in 2003 to create FICC, the third subsidiary providing clearance and settlement services.

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DTCC

The Decade of BCP

DTCC

In 2002, DTCC launches a sweeping post-9/11 BCP initiative to fortify the organization's resiliency against acts of terror and natural disasters, a program that completely transforms its infrastructure. In 2003, the Dallas office opens and work begins on the Tampa office, which opens in 2004 with the capability to complete daily settlement. In 2004, DTCC implements the capacity to ensure full data recovery in the event of catastrophic act.

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DTCC

The Decade of Technology Transformation

DTCC

DTCC reinvents its IT organization, adopting technology-industry standards that redefine how the company develops applications and manages its infrastructure. And in a multi-year initiative that cuts industry costs and bolsters business continuity, DTCC consolidates the infrastructures of FICC and NSCC under a single umbrella.

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DTCC

OTC Derivatives Game-Changer

DTCC

Years before OTC derivatives find their way to the front page of newspapers, DTCC leverages its critical insights to bring automation and risk mitigation to this complex market with the 2004 creation of Deriv/SERV and the 2008 launch of the Trade Information Warehouse - effectively inventing the first swap data repository. DTCC continues to innovate by creating the first-ever Regulators' Portal to bring transparency to this previously opaque market. In 2012, the Global Trade Repository launches to aggregate global data for systemic risk management.

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DTCC

$1015 (That's a Quadrillion)

DTCC

DTCC achieves a historic breakthrough in 2004 by settling more than one quadrillion dollars in securities transactions for the first time - a milestone it has accomplished every year since with the same level of certainty and reliability that the industry has come to expect.

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DTCC

Crossing the Atlantic and Pacific

DTCC

In 2007, DTCC launches its European clearing subsidiary, EuroCCP, which dramatically cuts the cost of clearing in Europe and becomes a driving force for full interoperability between clearinghouses. DTCC's global expansion continues to the Asia-Pacific region with the opening of new offices in Shanghai, Chennai and Tokyo. In 2012, DTCC selects Singapore as the site for its first data center in Asia.

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DTCC

2008 Financial Meltdown

DTCC

The October 2008 bankruptcy of Lehman Brothers is a defining moment in the history of global markets and sparks a financial crisis that nearly leads to the meltdown of the financial system. DTCC plays a critical role in protecting the industry and ensuring market stability by resolving $500 billion in exposure - the largest liquidation in U.S. financial history.

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DTCC

Alternative Solutions

DTCC

In 2008, DTCC transforms processing in the rapidly expanding alternative investment industry with the launch of Alternative Investment Products service by linking market participants through a single platform.

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DTCC

DTCC 3.0

DTCC

In 2010, DTCC launches "DTCC 3.0" to transform its risk management capabilities and culture to address dramatic changes reshaping the industry's market structure along with new regulations globally. DTCC also strengthens its corporate governance, separating the roles of Chairman and CEO and creating the position of Group Chief Risk Officer.

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DTCC

Teaming Up to Create NYPC

DTCC

In 2010, DTCC and NYSE Euronext bring unprecedented innovation to the fixed income market with the launch of New York Portfolio Clearing (NYPC) - a joint venture that has the potential to revolutionize the clearing of fixed income and futures contracts.

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DTCC

The Dodd-Frank Response

DTCC

After months of rancorous debate on Capitol Hill, the U.S. Congress passes the Dodd-Frank Act in 2010 - a massive 2,300-page bill that represents the most significant changes to financial regulation in more than seven decades. The legislation creates significant opportunities for DTCC to extend its role in the industry and also brings new regulatory mandates, including the 2012 designation of DTC, NSCC and FICC as systemically important financial market utilities (SIFMU).

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DTCC

Data, Data, Data

DTCC

In 2010, DTCC acquires Avox Ltd. to establish the first industry-owned utility for business entity reference data. The acquisition sets the stage for DTCC to join with other industry providers to develop a global Legal Entity Identifier (LEI) solution. As the Financial Stability Board (FSB) continues to pursue this initiative, DTCC and SWIFT are selected by the U.S. CFTC to provide an interim solution, known as the CICI Utility.

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DTCC

MBS Gets a CCP

DTCC

In 2012, the MBS CCP goes live, the first central counterparty created in the U.S. cash markets in more than a quarter-century, giving the industry a settlement methodology to reduce risk and costs in what has become a $100-trillion-a-year market.

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DTCC

Managing the Unexpected

DTCC

In 2012, over the course of less than three months, DTCC manages the twin crises of the Knight Capital market event and Superstorm Sandy, which brought massive flooding and extensive damage to its headquarters in Lower Manhattan. These events reinforce DTCC's reputation for resiliency and managing fast-moving, unanticipated crises that pose significant threats to the financial system - and help cement the company's global reputation for stability and resiliency during times of uncertainty. The week of the storm, DTCC subsidiaries processes nearly US$19 trillion in securities transactions.

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DTCC
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