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Jul 09, 2012 • Press Releases

DTCC Calls On Industry To "Fully Dematerialize" U.S. Financial Services Market

White paper outlines multi-year plan to eliminate physical certificates

New York, July 9, 2012 – The Depository Trust & Clearing Corporation (DTCC) today outlined a proposal to fully dematerialize the U.S. financial services industry, helping reduce the costs and risks associated with existing physical securities.  The multi-year program is designed to further drive the elimination of all remaining physical certificates in the U.S. market. 

The proposal comes in a white paper – Strengthening the U.S. Financial Markets: A Proposal to Fully Dematerialize Physical Securities, Eliminating the Costs and Risks They Incur – issued today by The Depository Trust Company (DTC), a DTCC subsidiary.  The paper states that “complete dematerialization will contribute to a more cost-effective, efficient, secure and competitive U.S. marketplace” and calls for the input and cooperation of all industry sectors.

While the campaign to immobilize and dematerialize the U.S. financial markets has been very successful to date, the paper says, the industry still faces a remaining fixed-cost base that will disappear only once it achieves complete dematerialization.

“Thanks to the success of ongoing dematerialization efforts, the economies of scale for physical processing have been reversed:  the fixed costs incurred to support physical processing are being recovered through dwindling transactions,” according to the paper.  “That means, as the number of physical issuances and transactions declines, the unit cost of processing them rises…until the U.S. markets are fully dematerialized, the industry will be obliged to support this fixed-cost infrastructure for physical processing regardless of the volume of certificates processed.”

“The success of this plan will require strong support from both the industry and regulators,” the paper further states.  “It will hinge on the industry’s adoption of new business practices that will call for changes in technology platforms, the legal landscape and in DTC’s pricing policy, as well as regulatory approval.”

“This paper is a call to action,” said Susan Cosgrove, DTCC managing director and general manager, Settlement and Asset Services. “We’re asking all sectors of the industry – stakeholders, banks, brokers, transfer agents, regulators and industry associations – to partner with us and to provide in-depth feedback on the proposals in this paper and help identify key, value-added services DTC can give market participants to accelerate the drive toward full dematerialization.”

Depending on the industry’s response, DTC could begin implementing recommendations for its dematerialization campaign in 2013, with the goal of reducing and ultimately eliminating physical processing over the following three-to-five years.

 (The white paper – Strengthening the U.S. Financial Markets: A Proposal to Fully Dematerialize Physical Securities, Eliminating the Costs and Risks They Incur – is available at under Thought Leadership, White Papers.) 

About DTCC

Through operating facilities and data centers around the world, DTCC and its subsidiary companies automate, centralize and standardize the post-trade processing of financial transactions for thousands of institutions worldwide. With more than 40 years of experience, DTCC is the premier post-trade infrastructure for the global financial markets, simplifying the complexities of clearance, settlement, asset servicing, global data management and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, derivatives, money market instruments, syndicated loans, mutual funds, alternative investment products, and insurance transactions. In 2011, DTCC processed securities transactions valued at approximately US$1.7 quadrillion. Its depository provides custody and asset servicing for securities issues from 122 countries and territories valued at US$39.5 trillion. DTCC’s global OTC derivatives trade repositories hold records on more than US$500 trillion in gross notional value on transactions across multiple asset classes globally. For more information, visit

Edward C. Kelleher


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