DTCC Connection

Dec 01, 2010 • DTCC Connection

‘Life Cycle of a Security’

by Steve Letzler


DTCC has published a new book called "Life Cycle of a Security" that provides a high-level look at the activities that underpin securities and ensure safety, soundness and risk miti-gation in the global financial marketplace.


The booklet focuses principally on the activities of The Depository Trust Company (DTC), the depository subsidiary of DTCC and the world's largest central securities depository. It provides a concise, plain-English explanation of how DTC supports the launch of initial public offerings (IPOs), completes settlement of securities transactions, holds custody and services the assets on behalf of the industry.


Second in a series

The new book is a companion piece to "A Guide to Clearance and Settlement - An Introduction to DTCC," which DTCC published in 2009. Policymakers have recognized that book's value. Over the past year, during discussions on U.S. financial market reform, the book played a critical role in helping to educate members of the U.S. Congress, their staffs, regulators, media, academics and other parties about DTCC and how DTCC protects the integrity of the financial markets.


The "Guide to Clearance and Settlement" has been recognized for providing an excellent overview of clearing and settlement of securities and defining the role of DTCC in the process by customers, infrastructure organizations and exchanges around the world. In China, for instance, according to comments received by DTCC, the book has provided new understanding about how the U.S. markets function.


One senior executive at a Wall Street firm said in an email to DTCC: "Great job! This is just what the Street needs." Another executive in London noted, "The book has proven popular with our Operations Teams in Dublin and Canary Wharf. Can you send a dozen more?"


The book also won praise in the media in both the U.K. and the U.S. The Wall Street Journal cited the publication in its Overheard column on November 18, 2009: "The 'Guide to Clearance and Settlement' explains an unglamorous but vital financial pillar, with such page-turning chapters as 'Matching and Netting'." Overheard welcomed the "plain-English" approach. According to Global Custodian, "The book succeeds triumphantly in its aim of conveying the core concepts of clearing and settlement, while keeping the narrative at a level Everyman (and Woman) can understand."


Copies of both books are now part of the collection at the Museum of American Finance and the Securities and Exchange Historical Society, which will help to codify DTCC's rich history and role in the financial services industry.


Explaining DTCC's 'vital role'

"These publications are important because as policymakers and others begin to understand our role as a market-neutral, at-cost utility, we gain their trust and their willingness to listen to our expertise and input," said Donald F. Donahue, DTCC CEO. "Together, we believe these two booklets provide a broad overview of how capital markets work behind the scenes, and the vital role DTCC plays in bringing safety, reliability and transparency to the financial markets."


To obtain a copy

The new book is available free of charge to DTCC member firms through DTCC's Relationship Services at +1 800.422.0582 or emailing rmsupport@dtcc.com. Regulators may contact Courtney Hill in DTCC's General Counsel's Office to obtain a complimentary copy by calling +1 212.855.3224 or emailing chill@dtcc.com.


Both books are also available for sale at Amazon.com at $9.95 each. @


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