Stock Settlement and Clearance in the United States

Abstract

This abstract was created post-production by the JFI Editorial Board.

Capital markets would be less efficient without the existence of the Depository Trust and Clearance Corporation (DTCC) , if they existed at all. This report sheds light on the Depository Trust and Clearance Corporation, and its two main components the Depository Trust Corporation (DTC) and the National Security Clearing Corporation (NSCC). It is the job of the two organizations to provide an efficient and safe way for the buyer and seller to exchange securities and money, thus "clearing and settling" the transaction. Broker-to-broker trades are processed by National Securities Clearing Corporation (NSCC), which handles posttrade processing for virtually all equity, municipal and corporate bond transactions in the U.S. market. DTCC also provides clearance and settlement for institutional trades by mutual funds, pension funds, hedge funds, bank trust departments, and insurance companies.