The Depository Trust Company (DTC), the central securities depository subsidiary of DTCC, provides settlement services for virtually all equity, corporate debt and municipal debt trades transacted on the New York Stock Exchange, NASDAQ, regional exchanges and electronic communication networks (ECNs) in the U.S. Approximately 1.4 million settlement-related transactions per day, with a value of approximately $600 billion, are completed at DTC.
The service allows for the collection/disbursement of a participant’s net obligations and credits, via its settling bank through the NSS system of the Federal Reserve.
Using collateral and net debit cap risk management controls, DTC’s settlement system protects its participants against the credit and liquidity risks of the failure to settle by DTC’s largest participant or affiliated family.
DTC’s settlement service offers participants a number of settlement capabilities, including but not limited to: settlement of securities transaction through Deliver Orders (DOs); collection of option contract premiums by processing Premium Payment Orders (PPOs); collection of stock loan mark-to-markets on open contracts by processing Securities Payment Orders (SPOs); pledging securities to pledgees as collateral through the collateral loan system; pledging securities to the Options Clearing Corporation (OCC) to meet OCC margin requirements.