DCC&S is conveniently accessible via mainframe over DTCC’s SMART (Securely Managed and Reliable Technology) connection or through DTCC WebDirect, a web interface that gives DTCC clients direct access over the Internet to services provided by DTCC's subsidiaries.
There are two types of DCC&S processing scenarios :
1. Dual–Party Processing:
Firms processing transactions as a record keeper/third party administrator (TPA) and trustee can submit Fund/SERV transactions (buys, sells and/or exchanges) and also perform money settlement with NSCC.
Clearing firms” may also transact in a similar capacity and can process transactions from outside record keepers, TPAs, trustees and other constituents.
In this scenario, both firm and fund are NSCC members.
2. Tri-Party Processing:
An NSCC TPA member who processes as a record keeper for retirement plans can submit Fund/SERV transactions (buys, sells and/or exchanges) and obligate (based on existing agreement between the TPA and the settling entity) an NSCC broker/dealer, bank, trust company or insurance company for settlement.
In this scenario, TPA/record keeper, settling entity and fund are NSCC members.
High Level Process Flow (for both trading scenarios):
- NSCC settling entity (e.g., broker/dealer, bank/trust, insurance company, etc.,) can establish individual account information via MF’s Networking service. Typically, this occurs prior to the first trade.
- NSCC members can receive the daily Price and Rate File in order to price buys, sells and exchanges, enabling them to prepare transactions and move money and/or take action.
- After compiling and pricing transaction information, the NSCC member submits transactions to NSCC for processing, using either dual or tri-party processing methods.
- Upon completion of editing, Fund/SERV transmits orders to fund clients and the NSCC settling member (if tri-party scenario). Funds confirm or reject the orders through Fund/SERV.
- All confirmed transactions settle at NSCC. On the morning of T+1, NSCC provides settling members and funds with a net settlement figure and a summary of purchases, redemptions and exchanges. NSCC TPA members can also receive a copy of settlement files “for information purposes only” in order to reconcile confirmed transactions.
- Account activity, position updates and dividend information can be shared between NSCC firms and funds via the Networking service.