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  • Writer's pictureLee A. Blackman

What Is the Depository Trust Company (DTC)?

What Is the Depository Trust Company (DTC)?

By Will Kenton

Updated Nov 19, 2019

The Depository Trust Company (DTC) is one of the world's largest securities depositories. Founded in 1973 and based in New York City, the DTC is organized as a limited purpose trust company and provides safekeeping through electronic record-keeping of securities balances. It also acts as a clearinghouse to process and settle trades in corporate and municipal securities.

How the DTC Works

The settlement services that the DTC provides are designed to lower costs and risk and increase the efficiency of the market. The DTC offers net settlement obligations at the end of each day from trading in equity, debt, and money market instruments. The DTC also provides asset servicing, along with a range of services.

Most of the country’s biggest broker-dealers and banks are DTC participants. That means they deposit and hold securities at the DTC, which appear in the records of an issuer’s stock as the sole registered owner of those securities deposited at the DTC. The participants—the banks and the broker-dealers—own a proportionate interest in the aggregate shares of an issuer held at DTC. Bank X, for example, may contain a proportion of the group of shares of Stock BB held in at the DTC.

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