DTCC completes settlement system consolidation

DTCC completes settlement system consolidation

The Depository Trust & Clearing Corporation (DTCC) has completed the consolidation of the settlement systems of The Depository Trust Company (DTC) and National Securities Clearing Corporation (NSCC).

The two platforms provides clearance and settlement services for virtually all trades done on the New York Stock Exchange, Nasdaq, the American Stock Exchange as well as on all regional exchanges and electronic communications networks (ECNs) in the United States, amounting to more than $1.4 trillion each day.

The unified platform eliminates work for both banks and brokers, says the DTCC, since they have only one settlement system to support and one end-of-day settlement process to complete. Prior to consolidated settlement, customers accessed DTC and NSCC settlement systems separately, using different functions and screens to view their settlement obligations with each organisation. A single set of functions on the new system now enables users to view settlement information for both DTC and NSCC on the same screen and provides them with one end-of-day netted settlement obligation.

John Abel, director, DTCC product marketing and development says the introduction of the new system will result in a reduction of overhead costs.

"The consolidated system will end the settlement issue of wiring separate funds to satisfy separate obligations, which occurred when customers were dealing with two settlement platforms," he says.

This means that settling banks (banks that handle transferring money to and from DTC and NSCC on behalf of customers) need only make one payment – not two as they previously did – to settle both obligations.

The number of reports also will be reduced, says Abel. Instead of receiving several different settlement-related reports, customers will receive a new, consolidated DTC/NSCC Participant Settlement Super Statement. Settling banks will have the option of receiving a new, consolidated computer-to-computer facility (CCF) file.

DTCC has been running the unified system in parallel tests alongside the existing platforms since June 2003.

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