The US Model for Clearing and Settlement

An Overview of DTCC

The Depository Trust & Clearing Corporation

Table of Contents
Introduction The Depository Trust & Clearing Corporation What Markets Does DTCC Serve Today? A. Clearing and Settlement 1. Equities, Corporate and Municipal Bonds 2. Government Securities 3. Mortgage-Backed Securities B. Asset Services C. Global Corporate Actions D. OTC Derivatives E. Wealth Management Services F. Insurance Who Are Our Customers? Who Owns DTCC? Who Regulates Us? What are DTCCs Global Operating Capabilities? What are DTCCs Financial Strengths? How Does DTCCs Model Save Customers Money? Post-Trading Costs: EU and US Who Does DTCC Partner With? How Do We Manage Risk? How Do We Ensure Business Continuity? 6 6 6 6 7 7 7 8 8 9 1 3 3

Attachments: DTCC 2006 Performance In Brief Background Note on the Organisation in the US Market for Clearing and Settlement (prepared by the Cross-Border Committee of the Securities Industry Association for the European Commission, 10

April 2007

May 2005)

11

Introduction
For more than 30 years, DTCCs family of companies has helped automate, centralise, standardise and streamline processes that are critical to the safety and soundness of the capital markets. As a result, weve helped our customers increase their operational efficiency, reduce risk and lower cost. DTCC is a holding company established in 1999 to combine The Depository Trust Company (DTC) and National Securities Clearing Corporation (NSCC). Those companies, in turn, grew out of Wall Streets paperwork crisis in the late 1960s and early 1970s. Neither company, however, started out serving a national market. They were formed initially to handle clearing and immobilise securities solely for the New York Stock Exchange and American Stock Exchanges, and later on, Nasdaq. Clearing and settlement in the US was highly fragmented at the time. Regional markets, such as those in Boston, Philadelphia and Chicago, each maintained separate clearing and depository businesses. As trading volumes grew, customers became concerned about the high costs, inefficiencies, redundant systems and disparate processes, as well as the need to post collateral at each of the clearing companies. At the same time, US regulators sought to encourage the creation of a unified national market mechanism. To guide the process, they advanced a number of key concepts. At the heart of them were two primary principles: the need for customer choice, and the need for price transparency. To give traders an opportunity to buy or sell a security wherever the best price could be found, regulators required the creation of trading links between the exchanges. This meant that dealers could choose to have a trade executed on whichever market offered the best price. The corollary to this was, if a trade could be executed on any market, it could also be cleared and settled by whichever organisation offered a better price or more efficient service. In short, customer choice and competition were encouraged. Over time, US market participants came to realise that while they could always compete on the front end of the securities business, there were considerable cost-efficiencies and riskreduction advantages to commoditising back-office functions. They began to see the advantages of a centralised infrastructure model that could achieve economies of scale from critical mass. They also saw the value of centralised trade netting to reduce cost and risk. Eventually, customers steered the regional clearing and depository organisations into consolidationa process that took a number of years to complete. Between 1977 and 1995, five regional exchanges exited the business of clearance, settlement and custody, and customers consolidated this activity at NSCC and DTCC. And, the process of consolidation continues. Since 1999, DTCC has worked to bring our depository, DTC, and our equities clearing organisation, NSCC, under one roof. Later, we brought inand consolidatedtwo more clearing corporations for

fixed-income securities, Government Securities Clearing Corporation (GSCC) and Mortgage Backed Securities Clearing Corporation (MBSCC). Today, DTCC subsidiaries clear and settle nearly all US market trades in equities, corporate and municipal bonds, government securities and mortgage-backed securities, money market instruments and OTC derivatives. We also provide securities safekeeping and asset servicing capabilities for equities, corporate and municipal debt, collateralised mortgage obligations, exchange-traded funds, money market instruments and many other types of securities. DTCC is owned by its principal users and operates on an at-cost basis, which means we look to return profits we make to our customers. Driven in part by economies of scale, our transaction fees are among the lowest in the world. As our customers look to move beyond traditional trading in equities and fixed income securities to more derivative instruments, we continue to work with them, responding to where market forces are driving their businesses. For instance, we leveraged our experience and technology to rapidly build Deriv/SERV to automate and lower risk for the growing global market in credit default swaps and other

over-the-counter (OTC) derivative instruments. The point is, of course, that by developing services in conjunction with customers, we partner with our customers and continue to earn their business. DTCCs size has also not prevented us from being quick to market or innovative. In fact, the breadth of our experience across product lines and the need to build different technology solutions for diverse market sectors offer a distinct competitive advantage. Weve been able to repurpose technology and leverage existing software design to minimise our technology development costs. In 2006, for the third year in a row, our customers have given us a strong vote of confidence on the quality of service we provide to the industry. In our annual industry-wide customer satisfaction survey, DTCC received a world-class score of 91%. We look forward to the continued growth and development of additional services as we work to anticipate our customers needs and the changing nature of the industry. In our increasingly global industry, we also look forward to collaborating and partnering more closely with our colleagues around the world.

The Depository Trust & Clearing Corporation

DTCC, through its subsidiaries, provides clearing, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, money market instruments and over-the-counter derivatives. In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with their distribution networks. DTCCs depository provides custody and asset servicing for 2.8 million securities issues from the United States and 107 other countries and territories, valued at $36 trillion. In 2006, DTCC settled more than $1.5 quadrillion in securities transactions. DTCC operates through five subsidiarieseach of which serves a specific segment and risk profile within the securities industry: National Securities Clearing Corporation (NSCC) The Depository Trust Company (DTC) Fixed Income Clearing Corporation (FICC) DTCC Deriv/SERV LLC DTCC Solutions LLC DTCCs joint venture company, Omgeo, has 6,000 customers in 42 countries and plays a critical role in institutional post-trade processing, acting as a central information management and processing hub for brokers, investment managers and custodian banks.

clearing, settlement, risk management, central counterparty services and a guarantee of completion for virtually all broker-to-broker trades involving equities, corporate and municipal debt, American depositary receipts, exchange-traded funds, and unit investment trusts. NSCC also nets trades and payments among its participants, reducing the value of securities and payments that need to be exchanged by an average of 98% each day. NSCC generally clears and settles trades on a T+3 basis. Services available: Automated Customer Account Transfer Service (ACATS) Continuous Net Settlement (CNS) Custom Index Share Processing Inventory Management System Processing Trade Reporting and Confirmation Real-Time Trade Matching Reconfirmation and Pricing Service Settlement Services Stock Borrow Program 2. Government Securities The Government Securities Division (GSD) of the Fixed Income Clearing Corporation (FICC), a subsidiary of DTCC, provides real-time trade matching, clearing, risk management and netting for trades in US Government debt issues, including repurchase agreements or repos. Securities transactions processed by FICCs Government Securities Division include Treasury bills, bonds, notes, zero-coupon securities, government agency securities and inflation-indexed securities. Services available:

For a snapshot of DTCCs 2006 volume and value settled, please see attachment 1, page 11.

What Markets Does DTCC Serve Today?

A. Clearing and Settlement
1. Equities, Corporate and Municipal Bonds DTCCs subsidiary, National Securities Clearing Corporation (NSCC), established in 1976, provides

Auction Takedown Real-Time Trade Matching/RTTM Web Government Securities Net Settlement Services Fail Netting Repurchase (Repo) Agreement Processing General Collateral Finance Repo Services 3. Mortgage-Backed Securities The Mortgage-Backed Securities Division of the Fixed Income Clearing Corporation, a subsidiary of

DTCC, provides real-time automated and trade matching, trade confirmation, risk management, netting and electronic pool notification to the mortgage-backed securities market. Key participants in this market are mortgage originators, government-sponsored enterprises, registered broker/dealers, institutional investors, investment managers, mutual funds, commercial banks, insurance companies and other financial institutions. Services available: Real-Time Trade Matching Electronic Pool Notification Services Netting Services Mortgage-Backed Securities Clearing Services

C. Global Corporate Actions

DTCCs Global Corporate Action Validation Service (GCA VS), operated by DTCC Solutions LLC, simplifies announcement processing by providing a centralised source of scrubbed information about corporate actions, including tender offers, conversions, stock splits, and nearly 100 other types of events for equities and fixed-income instruments traded in Europe, Asia-Pacific and the Americas. For banks, broker/dealers and other financial institutions, the GCA VS transforms the way corporate action announcements are managed globally by eliminating redundant operations and technology, and by reducing the high fixed costs associated with this labor-intensive processing. In 2006, GCA VS processed more than 899,000 corporate actions from more than 160 countries, the most complete global coverage of corporate actions by any organisation.

B. Asset Services
DTCCs subsidiary, The Depository Trust Company, established in 1973, was created to reduce costs and provide clearing and settlement efficiencies by immobilising securities and making book-entry changes to ownership of the securities. DTC provides securities movements for NSCCs net settlements, and settlement for institutional trades (which typically involve money and securities transfers between custodian banks and broker/dealers), as well as money market instruments. In 2006, DTC settled transactions worth almost $445 trillion, and processed 292.7 million book-entry deliveries. In addition to settlement services, DTC brings efficiency to the securities industry by retaining custody of almost 2.8 million securities issues worth about $36 trillion, including securities issued in the US and more than 100 other countries. Services available: Custody & Safekeeping Services Underwriting Services Deposit & Withdrawal Services Dividend, Reorganisation and Proxy Services Restricted Securities Family of Services Direct Registration Service

D. OTC Derivatives
DTCC Deriv/SERV LLC provides automated matching and confirmation services for over-thecounter (OTC) derivatives trades, including credit, equity and interest rate derivatives. It also provides related matching of payment flows and bilateral netting services. Deriv/SERVs customer base, which includes dealers and buy-side firms from more than 30 countries, is the largest of any post-trade service provider in the OTC derivatives marketplace. In 2006, Deriv/SERV processed a record 2.6 million transactions. Deriv/SERV has already been an important driver in increasing electronic confirmation rates, while lowering the risk and cost of labor-intensive, paper-based processing. More than 80% of credit derivatives traded globally are now confirmed through Deriv/SERV, up from 15% in 2004. During 2006, DTCC also launched its global Trade Information Warehouse to bring increased accuracy, cost reduction and reduced risk to the post-trade processing of OTC derivatives contracts. The warehouse maintains the primary record of

each contract and handles the servicing of contracts over their lifecycle, which can extend for many years. Beginning with credit derivatives, this global infrastructure solution, which was developed in close collaboration with leading dealers and buy-side firms, is designed to be extended to accommodate interest rate, equity and other OTC derivatives. Services available: Credit Default Swaps Matching and Confirmation Equity Derivatives Matching and Confirmation Interest Rate Derivatives Matching and Confirmation Payment Matching, and Bilateral Netting Trade Information Warehouse

Services available: ACATS-Fund/SERV Commission Settlement Defined Contribution Clearance & Settlement Fund/SERV Fund/SPEED Mutual Fund Profile Service Networking Transfer of Retirement Assets

E. Wealth Management Services

DTCC also provides a family of services to support mutual funds, managed accounts and growing interest in alternative investment products. Mutual Fund Services, provided by DTCCs subsidiary, NSCC, are the acknowledged industry standards for processing fund transactions, communicating account-related information, and linking fund companies with their growing network of distribution firms. Fund/SERV automates purchases, registrations, redemptions and settlement of these fund transactions in the US and for off-shore funds. Other capabilities include coordinating account information between funds and firms; processing defined contribution transactions; settling commission payments; transferring accounts between firms, and assets in IRAs between fund companies; and providing a centralised repository for information contained in a funds prospectus, thereby expanding the services role as a primary industry source for rules-based processing. Mutual Fund Services also provide money settlement of transactions through the Fedwire system.

DTCCs Managed Accounts Service standardises the exchange of account and investment information through one central gateway, significantly reducing operational costs, errors and the related risks. Introduced in 2006 by DTCC Solutions LLC, the service simplifies an unwieldy and costly account set-up process, linking investment managers, sponsoring broker/dealers and service providers through one centralised, automated platform. The service also includes features that address account maintenance, corporate actions and fee billing. Features available: Account Set-Up Account Maintenance Corporate Actions Fee Billing

DTCCs planned Alternative Investment Products service will bring automation and efficiency to critical transactions like subscriptions, redemptions and position and valuation reporting for hedge funds, funds of hedge funds, real estate investment trusts and other alternative investments. The proposed service will be built on a platform that will streamline trade order, documentation workflow, reporting and settlement of these complex products. In 2007, several hedge funds, fund administrators and broker/dealer firms will pilot the service, which is being designed to accommodate global hedge fund providers and settlement reporting in multiple currencies. The service will be provided by DTCCs subsidiary, NSCC.

F. Insurance
Insurance Services, provided by DTCCs subsidiary, NSCC, is helping to commoditise and mainstream annuities, life insurance and retirement programs. The services include processing of annuity applications and premiums, licensing and appointments, commission payments, positions and valuations, asset pricing, financial activity reporting and annuity customer account transfers. In 2007, two services will be added: Fund Transfers within variable annuities; and Attachments, which will support the electronic transfer of images, signatures and other documents. The aim of the business is to automate and provide seamless end-to-end communication between insurance carriers, distributors and their solution providers for the sale, processing and money settlement of all types of insurance products nationwide.

banks, broker/dealers, mutual funds and other financial institutions. DTCC operates on an at-cost basis, returning excess revenue from transaction fees to its member firms.

Who Regulates Us?

All services provided through the clearing corporations and depository are registered with and regulated by the US Securities and Exchange Commission (SEC). The depository is also a member of the US Federal Reserve System and a limitedpurpose trust company under New York State banking law.

What Are DTCCs Global Operating Capabilities?

DTCCs clearing and settlement systems have been built with the flexibility to accommodate practices in other markets, by incorporating multiple settlement cutoffs, for example. Our subsidiaries can accept real-time input from exchanges and other marketplaces outside the US, and can accept trades in multiple currencies. And our depository has the ability to settle and service assets in currencies other than the US dollar, with the flexibility to add additional currencies as needed. With regard to cross-border exchange mergers, such as the New York Stock Exchanges (NYSE) merger with Euronext, we are making systems enhancements to meet specific requirements and deploy those changes on an accelerated timetable. Since almost half of our customer base are firms that operate on a global basis, we continue to expand our facilities in the UK and China, as well as provide customer servicing capabilities on a 24/7 basis. DTCC has an extensive business continuity program, which includes a fully redundant, self-healing telecommunications network and multiple data centers operating at great distances that ensure replication and recovery of data to within a two-minute window.

Who Are Our Customers?

DTCCs customer base extends to thousands of companies within the global financial services industry. DTCC serves brokers, dealers, institutional investors, banks, trust companies, mutual fund companies, insurance carriers, hedge funds and other financial intermediarieseither directly or through correspondent relationships. Increasingly, DTCCs customers operate both in the US and overseas, where DTCC continues to provide them with services. In the US, DTCC provides critical services to the markets for US Government and mortgage-backed securities, and to all US equity marketplaces, including the New York Stock Exchange, The Nasdaq Stock Market, the American Stock Exchange, and regional US markets, as well as electronic trading and communications networks (ECNs).

Who Owns DTCC?

DTCC is industry-owned by its customers who are members of the financial community, such as

Omgeo, DTCCs joint venture with Thomson, provides global support for institutional post-trade processing and offers customers centralised, automated access to multiple third-party service providers, through Omgeo Connect. DTCC has 16 cross-border depository links with central infrastructure organisations worldwide, including a link with the Canadian Depository for Securities, which enables DTC to settle transactions in Canadian dollars on behalf of its participants. DTCC also has signed information and cooperation agreements with major post-trade infrastructure organisations in Japan, Korea, China and Taiwan.

targets, and the company employs a variety of best practices and strategies, including our Six Sigma quality program and our successful pursuit of the Capability Maturity Model Integration (CMMI) recognition for standardising our technology processes, to help us achieve our goals. Rebates and fee reductions are only part of the savings DTCC delivers to the industry. The netting down, or reducing the number of trade obligations requiring financial settlement, and streamlining settlement processes frees up trillions of dollars of capital each year that customers can then use for other investment purposes. NSCC optimises capital for its customers by netting down trade obligations through its Continuous Net Settlement system. In 2006, NSCC reduced the total value of obligations requiring financial settlement by 98%from $174.9 trillion to $3.8 trillion. On June 8, the peak trading day of 2006, NSCC processed 50.1 million transactions valued at $1.02 trillion, but through netting, reduced the value of obligations settling by 98% to $16.6 billion. Through its daily netting process, FICC sharply lowers the total number of government and mortgage-backed securities trade obligations that require financial settlement. In 2006, FICCs netting process eliminated three-quarters of all government securities trades requiring settlement, and nearly 95% of all mortgage-backed securities trades. This markedly increased the capital available to the financial services industry, while lowering risk and improving efficiency. Extensive risk mitigation services from DTCC also help the industry avoid potential loss. (See Risk Management page 8.)

What Are DTCCs Financial Strengths?

In 2006, each of DTCCs regulated subsidiaries (DTC, NSCC, FICC) received Standard & Poors highest credit rating, AAA/A-1+. DTCCs subsidiaries rules require most participants to maintain deposits of collateral related to their activities based on calculated requirements to secure participants obligations and certain liabilities of the subsidiaries. In 2006, DTCC generated revenue of just over $1.3 billion, and gave back $580 million in rebates, discounts and interest. In addition, DTCC reduced its transaction fees for 2006 by $182 million for services provided by its subsidiaries.

How Does DTCCs Model Save Customers Money?

DTCCs rebates and fee reductions reflect its economies of scale, critical mass and tight fiscal management. The record rebates and recent fee reductions reflect DTCCs continuing commitment to eliminate operational inefficiencies and drive down clearing and settlement costs. DTCCs management team has established aggressive yearly expense reduction

Post-Trading Costs: European Union and US

In recent years, several European studies have compared the costs of post-trade processing in the EU with the US. The studies have found that post-trading processing costs in the EU are higher 7

than in the US, both for EU-domestic and crossborder transactions. While DTCC has, on request, contributed data to various comparative cost studies, we have not sought to draw our own comparisons. As the European Commission pointed out in its working paper draft about post-trading, many assumptions impact this calculation, and it is difficult to achieve a true comparison. The Commission analysed the studies, which include CEPS, Giovannini I, LSE/Oxera, NERA Economic Consulting, AFTI/Eurogroup, among others, and concluded that: In the EU market, a cross-border equity transaction is two-to-six times more expensive than a domestic transaction from an investors point of view. A domestic transaction is up to eight times more expensive in the EU post-trading environment than at DTCC. The studies show that the aggregate excess cost of post-trading for investors in the EU is between 2 billion and 5 billion. According to DTCCs estimate, clearing an equity trade in the US market now costs about USD2.0 cents ( 0.015) per side, after rebates and discounts. These calculations are less than estimates by the European studies because they rely on different assumptions (e.g., average trade size, inclusion of rebates and discounts).

DTCC welcomes service organisations reaching out to us, where business knowledge and technological advantage can add value to the breadth of capabilities we can jointly offer to our customers. DTCC has pursued a strategy to buy v. build solutions where it would reduce costs. We partner with well-respected technology and telecom companies where this collaboration could bring about innovation, and create alliances with major consulting companies where their adeptness at helping the financial service industry identify opportunities for greater efficiency can be joined with our expertise as an infrastructure organisation. One of the first major steps we took soon after DTCC was formed in 1999 was to partner with Thomson Financial to create Omgeo. No development illustrates our commitment to a global business strategy of forging partnerships more than Omgeo, which plays a critical role in the global securities industry as a central information management and processing hub for broker/dealers, investment managers and custodian banks. A few years ago, we teamed up with Euroclear and Clearstream to build a new service that automates pre-issuance messaging for new issues of European commercial paper. Euroclear and Clearstream are using this technology to serve their customers. It leverages technology we originally developed for the US commercial paper market. DTCC continues to actively seek out partners and collaborative arrangements to help us serve our customers. We view partnering with other service providers as critical to ensuring our capacity to meet and exceed customer expectations.

Who Does DTCC Partner With?

DTCC has hundreds of strategic partners major companies, and smaller-sized and specialised software providers. In addition, DTCC maintains strong working relationships with clearing agencies and securities depositories in dozens of countries worldwide.

How Do We Manage Risk?

Managing the risks inherent in executing securities transactions and holding securities in custody is a key component of DTCCs business. The globalisation of financial markets, the trading of more complex instruments and the application of new technologies all make the management of risk more criticaland more challenging.

Todays markets require strong risk management, and our customers place their confidence in DTCC. DTCC routinely examines a wide range of factors associated with market risk, credit risk, operational risk and enterprise risk. Tools DTCC employs to mitigate risk include continuous trade netting, capital adequacy standards, a common clearing fund, a fully collateralised settlement system that is marked-to-market daily, ongoing operational risk assessment, business resiliency exercises, the wide geographic dispersion of operating and data centers, a variety of advanced quantitative analytical methodologies such as back and stress testing, and a special focus on regulatory and compliance issues. In addition, DTCCs principal subsidiaries all carry the highest credit ratings. By operating as central counterparties and thus taking the risk onto themselves, DTCCs clearing subsidiaries help the industry reduce the risk associated with trading, while freeing up available capital. The clearing corporations do this by stepping in between the seller and buyer of each trade to assume the counterparty credit risk and the responsibility to deliver the securities to the buyer and payment to the seller. This is the function of a central counterparty. In the course of assuming this level of risk, each DTCC subsidiary sets minimum standards for capital adequacy and collateral that its customers must meet in order to do business. Customers typically must post collateral, and each customers collateral requirements can change daily, based on its open trading positions. The risk management programs operated by DTCC clearing subsidiaries determine how much collateral is required from each customer to secure its outstanding trading obligations. DTCCs depository controls the final settlement of transactions in equities, corporate and municipal debt, money market instruments, and unit investment trusts, ensuring its ability to complete settlement payments through a series of settlement controls, including net debit caps and collateralisation. More recently, DTCC also has expanded its use of analytical value-at-risk methodologies for stress testing of customer and participant exposure in

extreme market conditions. The company now regularly performs back testing of the quality and accuracy of its risk management systems. And it uses the results of these tests to recalculate the clearing fund and collateral requirements placed on its customers, or to respond to other risk factors that the tests may reveal. DTCC has long been in the business of managing risk on behalf of the industryand views it as a core competence.

How Do We Ensure Business Continuity?

DTCCs business continuity plan includes multiple data and operating centers, a highly-resilient, self-healing telecommunications network and data replication technology, which allows data to be captured and saved within 2 minutes at remote locations at a distance of more than 1,000 miles. On September 11, 2001, when the US markets closed, DTCCs facilities in lower Manhattan (ten blocks from the World Trade Center) remained open to ensure the completion of trade settlement. DTCC settled more than $280 billion on 9/11 and $1.8 trillion in securities transactions that week, which was critical to the resumption of market trading the following weeks. Afterward, DTCC moved swiftly to implement a comprehensive business continuity plan to further protect and decentralise staff and systems. DTCC enhanced its communications network and expanded both the connectivity testing with major customers and the documentation we provide on testing results. DTCC now has fully redundant capabilities for all critical business functions. We can, and have, completed daily settlement from different locations. Also in 2005, DTCC mobilised to help our customers manage through Hurricane Katrina and its aftermath. DTCC swiftly enacted steps to help customers impacted by the storm, along with issuers and agents, to cope with the operational problems, reduce risk and restore business as usual. 9

Attachment 1

DTCC 2006 Performance . . . In Brief

Performance Item 2006 $1.36 billion $1.5 quadrillion $140.2 trillion $36 trillion 292.7 million 2005 $1.28 billion $1.4 quadrillion $113.8 trillion $31.2 trillion 263 million % Change + 7% + 8% + 23% + 15% + 11%

Revenue
Settlement Value of securities settled through DTCC Value of money market settlement activity (one side) Value of securities on deposit at DTC Volume of book-entry deliveries

Equity, ETF, corporate and municipal bond transactions processed (NSCC)

Value of NSCC equity, municipal/corporate bond and ETF transactions processed Volume Volume on peak day (NSCC- 10/06/05) Peak day netting factor $175 trillion 8.5 billion 50.1 million 98% $130.7 trillion 6.6 billion 36.5 million 98% + 34% + 29% + 37% n/a

Government securities transactions processed (FICC)

Value of trades in-net Volume $864.1 trillion 24.9 million $874.3 trillion 25.5 million - 1% - 2%

Mortgage-backed securities transactions processed (FICC)

Value Volume $76.1 trillion 1.7 million 753 $75.6 trillion 1.65 million 207 + 1% + 3% + 264%

Deriv/SERV
Total customers Mutual fund transactions processed (NSCC Fund/SERV) Value Volume Insurance applications, premiums and commissions processed (NSCC) Value Volume DTC underwriting Value of issues Volume of issues DTC cash dividend and interest processing Value of dividend and interest payments Volume DTC corporate actions processing Value of payments involved Volume Value of non-US issues on deposit at DTC

$2.1 trillion 143 million

$1.67 trillion 117.8 million

+ 24% + 21%

$ 16.3 billion 53.5 million $4.3 trillion 50,867 $1.79 trillion 4,389,000 $1.47 trillion 271,780 $4.66 trillion

$13.0 billion 45.2 million $4.4 trillion 47,178 $1.60 trillion 3,920,000 $1.19 trillion 273,100 $3.29 trillion

+ 25% + 18% - 1% + 8% + 12% + 12% + 23% 0% + 42%

DTCC = The Depository Trust & Clearing Corporation; NSCC = National Securities Clearing Corporation; FICC = Fixed Income Clearing Corporation; DTC = The Depository Trust Company

10

Attachment 2

Background Note on the Organisation in the US Market for Clearing and Settlement (May 2005)

Prepared by the Cross-Border Committee of the Securities Industry Association For the European Commission

This background note has been prepared for the European Commissions Internal Market Directorate General to assist in its work on clearing and settlement. The six questions answered in this paper were provided by the Commission to guide the SIA on the topics of specific interest and relevance.

1. What were the market circumstances when the DTCC was created? Early Enabling Legislation Crisis as Catalyst Beginnings in Vertical Silos National Market System a Public Policy Horizontal Consolidation Vertical Re-Integration of CCP and CSD 2. What are the main differences between those circumstances and the current ones in Europe? Single Country Single Securities Regulator, Common Regulatory Framework Dominant Market Centre Homogeneous, Market Utility Business Model Separate Infrastructures for Cash and Derivatives Markets Cross-Border Services not Policy Priority 3. What were the arguments used in favour and against the creation of such a system?

Arguments Used in Favour: Regulatory Concerns, Efficiency Arguments Used Against: Revenue Protection, Anti-trust Dangers 4. How is the system working? 5. Have there been important changes in the structure of the DTCC? National Market System Expansion in Instruments Expansion in Domestic Services Expansion in Cross-Border Services Continued Enlargement and Rationalisation 6. What are the strongest and weakest points of such a system? Strongest Points Cautionary Notes on the Replication of US Market Features in Europe Abbreviations References

11

1. What were the market circumstances when the DTCC was created?
The Depository Trust & Clearing Corporation (DTCC) is a holding company formed in 1999 to consolidate under the same corporate ownership the clearing and settlement infrastructures in the US the central counterparty National Securities Clearing Corporation (NSCC), and central securities depository The Depository Trust Company (DTC). The integration of NSCC and DTC was driven by market necessity. While the complementary functions of these two institutions resulted in many collaborative efforts over the two decades of their separate existence, by the late 1990s deregulation and evolutionary changes in the US financial industry meant that as both companies extended their services beyond their core functions, they were, in some cases, beginning to overlap and in danger of creating unnecessary conflicts, complexity and costs for their industry constituents. The integration resulted in a holding company with two separate operating subsidiaries, recognising the different products and services, regulatory requirements and risk profiles of clearing and settlement organisations. The three legal entities (the holding company and its two operating subsidiaries) share an executive management team and a single slate of directors. Centralised corporate services (i.e. legal, finance, auditing, etc.) support all three entities. In the European context, it may prove helpful to examine the creation and evolution of NSCC and DTC, in addition to the formation of the holding company DTCC. Early Enabling Legislation In 1961, twelve years before the establishment of DTC, the New York Stock Exchange (NYSE) together with several major custodian banks had already successfully run a one-year Pilot Operation for Central Handling of Securities. Beginning with 15 securities and 31 firms, deliveries were made between members via book-entry and without the physical movement of 12

certificates. Legislative changes were then initiated in order to prepare for a centralised service for all issues listed on the NYSE. In 1962, the process to amend Article 8 of the Uniform Commercial Code (UCC) was started in all the states, in order to sanction the transfer of ownership or pledge of securities by depository book-entry in lieu of delivering physical certificates. The last states amendment was obtained in 1970. Crisis as Catalyst The paperwork crisis in the securities industry that developed in the late 1960s served as the catalyst that accelerated the immobilisation and book-entry transfer of securities by a central service provider. At that time, brokers still exchanged physical certificates and checks for each trade, while hundreds of messengers scurried through Wall Street clutching bags of checks and securities. A sharp increase in trading led to a growing number of trades to fail. The paperwork crisis was so severe that, in order to help reduce the backlog, the exchanges closed every Wednesday and shortened trading hours on the other days. In 1968, the Central Certificate Service was established by the NYSE to immobilise share certificates, and the foundation of a national depository system had begun to take form. By the beginning of 1970, numerous studies of the problems of the US securities industry were under way. A common conclusion was that longterm solutions would require market-led efforts, and an inter-industry organisation, the Banking and Securities Industry Committee (BASIC) was formed. BASIC acted on a number of projects to reduce the costs and improve the process of securities operations, the most significant of which was the establishment of a Comprehensive Securities Depository System (CSDS), expanding on the NYSEs Central Certificate Service. Regional markets and banks soon joined in the process and a National Coordinating Group was formed. Beginnings in Vertical Silos NSCC and DTC were originally set up by the NYSE, the American Stock Exchange, and National Association of Securities Dealers (NASD). Other regional stock exchanges, such as those in Boston, Philadelphia, Chicago,

etc. each owned its respective clearing and settlement vehicles. In 1975 there were seven vertical silos. Although industry participants favoured consolidation of clearing and settlement arrangements, the exchanges opposed unless theirs was the surviving institution. National Market System a Public Policy The paperwork crisis and other problems within the securities industry in the late 1960s prompted the passage of the Securities Acts Amendments of 1975 to promote a unified national market in trading, clearing and settlement. Congress directed the Securities and Exchange Commission (SEC) to facilitate the establishment of the unified national system that would have five objectives: efficiency, competition, price transparency, best execution and order interaction. Congress policy was not to mandate a fixed market structure but to use the five objectives to guide a comprehensive but flexible regulatory approach. The SEC, however, was less concerned about competition among infrastructure providers than ensuring that there was an efficient, robust national infrastructure. CCPs and CSDs were required to apply for SEC registration as clearing agencies, the first time that these entities were regulated. Regulated free interfaces between regional infrastructures were to form the heart of the national market system. It is worth noting that the SEC was able to promote a national system for clearing and settlement while leaving open the possibility for any organisation wishing to compete. Any trading space wishing to clear and settle without going directly to the national infrastructures is free to do so as long as it meets the standards set by the SEC. In addition, any organisation can apply for approval and registration as a clearing agency (although in the cash equities markets no new entrant since the late 1970s has so far chosen to do so, and the existing entities have been consolidated and integrated). Horizontal Consolidation During 1976-7, about a year after the SEC released a report on the

cost savings that CCP consolidation would bring to the market, the NSCC was formed through the merger of the individual CCPs of the NYSE, the American Stock Exchange and NASD. Also in the same year, all CSDs affiliated with the individual stock exchanges were interlinked to form a national system. This was accomplished by CSDs opening accounts with each other. Market participants could then trade the stock of a company on any exchange and hold their shares in their home CSD, by an arrangement called one account settlement. When new shares were issued, the underwriter would put the issue into the CSD of its choice. The shares would then be transferred, via book entry at this CSD, to the account of a primary market subscribers home CSD. Subsequent secondary market trading would settle similarly by book entry. The regional stock exchanges vertically-integrated CCPs and CSDs were gradually absorbed into NSCC and DTC respectively, a twenty-year process that began in 1976 and ended with the last integration taking place in 1997. Vertical Re-Integration of CCP and CSD NSCC and DTC subsequently became subsidiaries of DTCC in 1999. The equities market structure today consists of competing stock exchanges and trading platforms that are required to make market information publicly available on terms that are fair and reasonable, but a single CCP and a single CSD under common ownership serving the national equities market. As covered in Section 5, it should be noted that equities have been only one of a wide range of financial instruments and markets supported by DTCC subsidiaries, in particular fixed income, some from the beginning and others over time.

2. What are the main differences between those circumstances and the current ones in Europe?
The main differences in the circumstances that led to the consolidation of clearing and market infrastructures in the US versus the current ones in Europe include the following: 13

Single Country Although there are both state and federal laws, and tax rates that are not the same in every state, the US is nonetheless one country with one currency. Relatively speaking, consolidation was more straightforward. Still, the 50 different state laws have from time to time posed challenges, as with revisions to Article 8 discussed above. Single Securities Regulator, Common Regulatory Framework In 1975, the US Congress made a firm and clear public policy to create a unified national market, with a single securities regulator directed to facilitate its establishment. The Congress set five policy objectives, and the SEC used a comprehensive and flexible regulatory approach to establish, monitor, and strengthen a regulatory environment that gave the forces of competition sufficient room to flourish. Although competition forces were allowed to shape market structure, a single regulator exercised its regulatory authority to act when necessary to address problems or practices that could stand in the way of achieving the objectives that Congress had set for the national market system. Where competition might not be sufficient, the SEC was empowered to act promptly and effectively to ensure that the rules and essential mechanisms were put in place as rapidly as possible. The SEC was also in a position to prompt, encourage and facilitate the securities industry to create solutions that furthered the unified national market objectives. Because the SECs mandate from Congress spanned all three securities market functions of trading, clearing and settlement, it could take action in a holistic manner that fulfilled the national market objectives. Central providers of clearing and settlement services (CCPs and CSDs) had to register with the SEC as registered clearing agencies and registered transfer agents, and be subject to common regulations. The common regulatory framework put in place since 1975 facilitated the consolidation which gradually happened over the next twenty years. When the SEC granted permanent registration status to the clearing agencies and transfer agents, it was primarily concerned with a robust

infrastructure for the unified national market system. The SEC paid considerable attention to the agencies provisions for participants fair representation and due process. It looked at each agencys governance proposal individually, and was more concerned with the objective of good governance who controlled each one, due process, etc. and not whether it was able to compete with the others.

Main differences with Europe: In Europe, there is

no empowered legislature to espouse an EU-wide system equivalent to the US national market system. A common regulatory framework in the European context is generally taken to mean the home country principle to facilitate competition across national borders. EU-wide minimum safety standards and governance objectives might not necessarily be considered to fall within the scope of a common regulatory framework. Dominant Market Centre The fact that there was one predominant market centre New York is significant in three respects. First, the New York markets clearing and settlement infrastructures had the economies of scale to invest in technology, and provided a low marginal cost foundation for national consolidation. Second, because of the large number of issuers whose shares were listed on the NYSE, legislative changes that enabled the formation of the CSD for that market had to be made by every state, paving the way for national legal harmonisation. These changes included the fiduciary laws of many states limiting the form and means of holding securities in certain capacities, and Article 8 of the UCC which then effectively limited ownership of depositories to security exchanges and associations (which would limit the full participation of banks). Third, the infrastructures in New York, NSCC and DTC, acted as the leader in the national standardisation of services and market practice.

Main differences with Europe: There are three

main trading centres: Euronext, Deutsche Brse, and the London Stock Exchange. The proposed takeover of the London Stock Exchange, if it materialises, might create a similarly dominant market centre.

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Homogeneous, Market Utility Business Model The regional CCPs and CSDs in the US were owned by stock exchanges and focused on their core function of providing a central service for their respective markets in clearing and settlement. NSCC and DTC were created at a time when stock exchanges and central service providers in clearing and settlement were typically not-for-profit market utilities owned by users. The ownership and governance of NSCC and DTC were from the outset those typical of market utilities. The NYSE, which owned the predecessor of the DTC, offered DTC stock to users in proportion to their usage. Although DTC has a trust company charter under New York State banking law and Federal Reserve membership, it used these initially to bolster its status with custodian banks and increase their confidence in depository custody, and later to open a central bank account in order to support socalled same-day (immediately available) net funds settlement, replacing net settlement by paper checks. DTC did not combine infrastructure CSD and commercial banking services.

Separate Infrastructures for Cash and Derivatives Markets Derivative financial instruments were quite new in the 1970s when the unified national market system was conceived. The options market built a single CCP owned by multiple exchanges from the outset; the exchanges that started trading options did not have existing options CCPs to protect. The financial futures market developed more slowly; not only was it in Chicago (not in New York), but it was also outside the jurisdiction of the SEC. The focus of consolidation at the time was therefore on the cash equity market alone. Government bonds and mortgage-backed securities are not held in DTC but in another national CSD, the Federal Reserve Bank.

Main differences with Europe: The homogeneous business model made the consolidation of market infrastructures in the US more straightforward than the current situation in Europe, where different ownership structures and business models bring competition issues to the forefront when consolidation happens. European trading, clearing and settlement infrastructures are mostly for-profit; some are user-owned, others
are shareholder owned and either privately held or publicly traded. The controversy in Europe over CCPs revolves around whether an exchange that owns one has an unfair competitive advantage derived from cross-subsidisation over an exchange that must rely upon an unaffiliated CCP potentially one owned or controlled by the , competing exchange. The controversy over CSDs in Europe revolve around (a) whether a bank has an unfair competitive advantage derived from leveraging and bundling over competitors when it owns or is affiliated with a CSD, (b) how much separation or transparency is needed between the competitive and infrastructure services, and (c) whether there are sufficient safeguards against abuse of dominant position.

Main differences with Europe: In Europe, the cash and derivatives markets are usually in the same financial centre in each country, making common ownership from the outset or via mergers more easy to accomplish. Also, government bonds and equities are usually immobilised in the same CSD. The unified clearing of all financial instruments, which can bring significant benefits to market participants not only in the form of lower and optimised clearing fund contributions but also improved regulatory reporting and surveillance, is easier to achieve in national markets in Europe than in the US.
Cross-border Services not Policy Priority Of $36 trillion worth of securities on deposit at DTC, about $3.4 trillion-worth are securities (mainly global bonds and shares) from non-US issuers, and another $1.2 trillion-worth is in the form of ADRs which also represent securities of non-US issuers. That said, DTCC has a primarily US-domestic focus. DTCC users benefit from economies of scale for all securities which are held and settled at DTC, but often use an entirely separate middleand back-office infrastructure for transactions in the rest of the world.

Main differences with Europe: In Europe, the policy direction is to remove barriers for national market infrastructures to provide cross-border services within the EU, with the objective of using competition among market infrastructures to drive intra-EU cross-border access costs down for the
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infrastructure users. Expansion of cross-border services beyond the EU is not a priority, either.

3. What were the arguments used in favour and against the creation of such a system? Arguments Used in Favour:
Regulatory Concerns The paperwork crisis of the late 1960s generated a deep concern within Congress and the SEC. Beginning in 1970 a series of hearings were conducted by US Senate and House of Representatives sub-committees and the SEC. After several years of intense discussion and debate over the vision of a national securities market system and its regulation, the Securities Acts Amendments of 1975 were passed to create a unified national market system. Efficiency The paperwork crisis brought the whole securities industry together, out of self-interest, to find a common solution to achieve efficiency. Banks, brokers and stock markets worked together in BASIC, the inter-industry organisation formed in 1970 that determined the DTCs characteristics and an acceptable corporate structure and management. BASICs efforts to establish the CSDS proceeded despite the legal uncertainty in the first few years of its work.

NSCC in 1976-7, the affiliated exchanges received a per-trade fee for several years to compensate them for revenues lost after the merger. The other regional markets concerns about competition issues (e.g. predatory pricing) were addressed via free interfaces between registered agencies. By the mid-1980's, as multiple market structures became less accepted as an inevitability, the divestment of the CCPs and the CSDs from the remaining vertical silos and their consolidation into NSCC and DTC went under way. Anti-trust Dangers During the early years of the implementation of the unified national market system, the SEC was unsuccessfully sued by a service provider to NSCC, who challenged the SECs temporary registration of NSCC and the latters failure to solicit competitive bids for a service contract. The court found that competition at the clearing level was of secondary importance to an efficient, robust infrastructure. In balancing the anti-trust dangers with the goal of a single national system, the court considered that the goal of the 1975 Securities Acts Amendments was to create the environment for effective competition among brokers, to the benefit of their investor customers, and not competition among clearing systems or their service providers.

Arguments Used Against:

Revenue Protection Opposition to consolidation, also out of self-interest, came from the infrastructures. Despite clear and compelling evidence of reduced costs, the infrastructure entities which would be absorbed into a single national system opposed the elimination of even one CCP . In most cases the CCPs accounted for a significant component of the revenue of their affiliated exchange, and both the exchanges and the CCPs opposed any integration unless theirs was the single remaining institution. When the NYSE, American Stock Exchange and NASD finally agreed to merge their CCPs to form

4. Have there been important changes in the structure of DTCC?

National Market System The most dramatic change in the early years was the establishment of the unified national market system concept, including national clearing and settlement, in the Securities Acts Amendments of 1975. Clearing agencies (including depositories) were then regulated for the first time. Since then, there had been a steady evolution in the scope of activities undertaken by NSCC and DTC. They were separate companies until their integration in 1999 under DTCC. The creation of the holding company DTCC gives the group more flexibility in expanding into non-regulated services as well as acquisitions.

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Expansion in Instruments and Domestic Transaction Services In answer to industry needs for greater synergies, cost reductions and efficiencies in the post-trade processing of all securities, DTC expanded continuously the number and types of securities it handles. In addition to equities, it processes corporate and municipal bonds, American and Global Depositary Receipts, collateralised mortgage obligations and exchange-traded funds, as well as commercial paper and other money market instruments. More than 2.7 million securities issues are now DTC-eligible. In its very early years, DTC introduced Institutional Delivery (ID), an electronic trade affirmation hub service that coordinates among investment managers, brokers and custodians which support institutional investors trades from execution through settlement and custody. This was the service that DTCC eventually spun-off into the Omgeo joint venture with Thomson Financial ESG. DTC has long provided centralised and comprehensive asset services. These include custody, securities distribution service for new issues, reorganisations (such as stock splits, spin-offs, bankruptcies, conversions, exchanges, mergers and tender offers), dividend and interest payments, redemptions, and US tax withholding. DTCC also more recently created non-regulated subsidiaries to provide a variety of post-trade processing services, such as DTCC Solutions LLC which offers services such as corporate actions validation and messaging, and DTCC Deriv/SERV LLC which offers an OTC derivatives processing solution. NSCC offers two non-CCP services which are central and automated service extensions that leverage its wide customer base of brokers with similar needs. Its mutual fund services include: standardised formats for, and centralised processing of, mutual fund purchases, redemptions, exchange orders and account registrations, automated and centralised exchange of customer account information between fund companies and their distributors. Its insurance services include: automated annuity

and life insurance application processing, premium payment and financial reporting, linking insurance carriers with broker/dealers, banks and trust companies through one automated, centralised, nationwide system. Both these services leverage on economies of scale of a wide customer base with similar needs for automated processing. NSCC indirectly provides a service to retail investors through its customer account transfer service, which moves any asset held in customer accounts from one broker to another. Expansion in Cross-Border Services A number of services were developed in response to specific user demand. DTC has securities accounts at several foreign CSDs, inter-market links that allow its users to settle foreign securities. These include the Canadian, German, and Swiss depositories. The Canadian service was set up initially to facilitate the settlement of Canadian shares that are traded OTC in New York. The German and Swiss arrangements were set up initially for several non-US issues listed and traded in US dollars on the NYSE (e.g. the German company Daimler Chrysler, Swiss company UBS). Similarly, a dozen CSDs from around the world have direct accounts at DTC. A global clearing network service set up in the 1980s is still in operation but usage is low. This service provides DTC users who desire a standardised communication format to use the DTC standard when they access foreign markets. DTC provides a messaging interface only; the users enter into direct custody and clearing agreements with agent banks in the foreign markets. In 2002 DTCC absorbed the Emerging Markets Clearing Corporation (EMCC) which was a specialised central counterparty for emerging markets debt. Due to low market demand the EMCC has since been wound down. The European Pre-Issuance Messaging (EPIM) service was developed for the issuance of European commercial paper in partnership with 17

Clearstream Banking Luxembourg and Euroclear Bank. This service leverages technology used in the US market to bring efficiencies to the European securities market infrastructure. Omgeo is a joint venture between DTCC and Thomson Financial that provides matching and trade reporting services for institutional investors trades worldwide, including the successor to the ID service originally introduced by DTC in 1974. Omgeo has specific relevance in that its significant market share and potential in the marketplace drew intense regulatory review. An SEC order defined a set of principles to govern interoperability between Omgeo and potential competitors requiring fair and reasonable linkages that are transparent to customers. To assure competition and to permit customers to choose a single matching service, the principles call for use of industry standard formats and protocols, prevent a matching service from using intellectual property to eliminate competition, prohibit interface surcharges, set out interface pricing principles, and provide strict guidelines for linkage implementation. In addition, the SEC order requires Omgeo to maintain high standards of safety and soundness, and calls for neutral industry involvement in the negotiations between Omgeo and potential competitors. The SEC intends to impose these conditions on all central matching services that obtain an exemption from registration. Continued Enlargement and Rationalisation In 2002, the DTCC holding company further integrated three additional CCPs which service US government securities, mortgage-backed securities, and emerging market debt respectively: MBS Clearing Corporation, originally founded in the late 1970s; the Government Securities Clearing Corporation, founded in 1986, and Emerging Markets Clearing Corporation, founded in the mid-1990s. DTCC has also discontinued services when market conditions caused a drop in demand for DTCC services. As mentioned above, the Emerging Markets Clearing Corporation has recently been wound down, due to lack of market activity. Settlement of mortgage-backed securities, which 18

were eligible securities both in DTC and the Federal Reserve, has been shifted to the Federal Reserve.

5. What are the strongest and weakest points of such a system?

Strongest Points:

A consolidated service provider which has the ultimate scale economies in serving the principal securities market in the US, that is neither motivated by profits nor share price. Constant reduction in customer costs is achieved through an at-cost operating mentality and a policy to return excess revenues to users in the form of discounts and rebates. Nevertheless, the focus is not only on price efficiency but also on operational risk management, robust business continuity arrangements, investor risk and compensating safeguards. The average fee paid by dealing firms for settling an equity transaction, US$ 2.0 cents ( 1.5 cents), is perhaps the lowest in the world. For the last five years, more than USD 200 million, or 20% of revenues, has been returned each year to the industry. The Board of Directors is composed almost entirely of customers. This leads to many benefits that are often otherwise derived from competition. User-pays transparency and an equitable pricing policy, which aligns fees with the cost of services provided, and which maintains a desired balance in revenues and margins between NSCC serving mainly brokers, and DTC serving mainly investors. Owned by its customers. Each DTC and NSCC participant is free to choose its own cash settlement agent that provides the best liquidity and credit services with the most competitive price and conditions. Credit risk taking is spread among a large number of banks. DTC has an account at the Federal Reserve and participants or their cash settlement agents settle NSCC and DTC transactions with finality in central bank money. Although each participant is still exposed to its cash settlement agent with whom it

holds cash balances, there is a choice of settlement agents and no concentration of credit exposure. No significant profit-generating services in fails coverage, securities or cash lending. All the above, and in addition strong corporate governance, operational risk management and financial safeguards to protect the organisation from member loss, contribute to a AAA/A-1+ credit ratings from Standard & Poors for longand short-term debt. Cautionary Notes on the Replication of US Market Features in Europe: As the single market infrastructure, significant costs are required to manage operational risk and to have in place robust, fail-proof redundant continuity of business arrangements. The tendency of the board might be to emphasize the needs of the largest users or the widest mutual needs of all users, though the DTCC Board balances this by including smaller firm participants as well. In the absence of financial performance pressures typical of for-profit organisations, unless special effort is made, new and growing specialised needs may be overlooked, resulting in under-investment for the future.

Operating on an at-cost basis predisposes the company to rely mainly on organic growth. Network effects, high fixed costs in IT infrastructure and economies of scale reduce the likelihood of new entrants in the domestic infrastructure role. Common ownership of the historically separate CCP and CSD can yield cost efficiencies through shared facilities only up to a point. Investments by both the market infrastructure and its participants are needed to maximise the benefits, such as a common communication interface. However, the investment expense may not be equitable to all participants. Absence of national law prohibiting physical certificates results in perpetuation of costs and risks in the continued existence of physical securities that are not dematerialised or immobilised in the CSD. The fragmentation of the infrastructures serving cash and derivatives markets is not optimal. This is a consequence of differences in the timing of market development, the financial centres where these markets flourished, and separate regulators.

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Abbreviations
BASIC CNS CSDS DTC DTCC EMCC EPIM FICC GSCC ID MBSCC NASD NSCC NYSE RTTM SEC UCC Banking and Securities Industry Committee Continuous Net Settlement Comprehensive Securities Depository System The Depository Trust Company The Depository Trust & Clearing Corporation Emerging Markets Clearing Corporation European Pre-Issuance Messaging Fixed Income Clearing Corporation Government Securities Clearing Corporation Institutional Delivery MBS Clearing Corporation National Association of Securities Dealers National Securities Clearing Corporation New York Stock Exchange Real-Time Trade Matching Securities and Exchange Commission Uniform Commercial Code

References
1. A Short History of The Depository Trust Company, DTC, 1998 2. Background on the Formation of The Depository Trust & Clearing Corporation, DTCC, 2000 3. Testimony Concerning Preserving and Strengthening the National Market System for Securities in the United States, Arthur Levitt, May 2000 4. EuroCCP Blueprint for a Single Pan-European Central Counterparty, European Securities Forum, Dec 2000 5. Annual Report, DTCC, 2002 6. Annual Report, DTCC, 2003

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