this article needs additional citations for verification . please help improve this article by adding citations to reliable sources . unsourced material may be challenged and removed . october 2012 learn how and when to remove this template message depository trust & clearing corporation type private industry finance genre holding company founded dtcc 1999 holding company for dtc 1973 and nscc 1976 headquarters 55 water street new york city u.s. number of locations 10 key people robert druskin executive chairman michael c. bodson president & ceo services financial revenue us 960 249 000 2009 net income us 104 774 000 2009 total assets us 3 573 790 000 1 total equity us 501 326 000 owner banks brokers subsidiaries nscc dtc ficc dtcc deriv serv llc dtcc solutions llc euroccp ltd. dtcc loan serv llc avox warehouse trust company llc dtcc derivatives repository ltd. website www.dtcc.com the depository trust & clearing corporation dtcc is an american post trade financial services company providing clearing and settlement services to the financial markets . it provides a way for buyers and sellers of securities to make their exchange in a safe and efficient way . it also functions as a central securities depository by providing central custody of securities . dtcc was established in 1999 as a holding company to combine the depository trust company dtc and national securities clearing corporation nscc . user owned and directed it automates centralizes standardizes and streamlines processes in the capital markets . 2 through its subsidiaries dtcc provides clearance settlement and information services for equities corporate and municipal bonds unit investment trusts government and mortgage backed securities money market instruments and over the counter derivatives . it also manages transactions between mutual funds and insurance carriers and their respective investors . in 2011 dtcc settled the vast majority of securities transactions in the united states and close to 1.7 quadrillion 3 4 5 in value worldwide making it by far the highest financial value processor in the world . 5 dtcc operates facilities in the new york metropolitan area and at multiple locations in and outside america . contents 1 history 1.1 legislation 2 controversy over naked short selling 3 subsidiaries 4 competition 5 references 6 external links history edit established in 1973 the depository trust company dtc was created to alleviate the rising volumes of paperwork and the lack of security that developed after rapid growth in the volume of transactions in the u.s. securities industry in the late 1960s . before dtc and nscc were formed brokers physically exchanged certificates employing hundreds of messengers to carry certificates and checks . the mechanisms brokers used to transfer securities and keep records relied heavily on pen and paper . the exchange of physical stock certificates was difficult inefficient and increasingly expensive . in the late 1960s with an unprecedented surge in trading leading to volumes of nearly 15 million shares a day on the nyse in april 1968 as opposed to 5 million a day just three years earlier which at the time had been considered overwhelming the paperwork burden became enormous . 6 7 stock certificates were left for weeks piled haphazardly on any level surface including filing cabinets and tables . stocks were mailed to wrong addresses or not mailed at all . overtime and night work became mandatory . turnover was 60 % a year . 8 to deal with this large volume which was overwhelming brokerage firms the stock exchanges were forced to close every week they chose every wednesday and trading hours were shortened on other days of the week . two things solved the crisis the first was to hold all paper stock certificates in one centralized location and automate the process by keeping electronic records of all certificates and securities clearing and settlement changes of ownership and other securities transactions . the method was first used in austria by the vienna giro and depository association in 1872 . 9 one problem was state laws requiring brokers to deliver certificates to investors . eventually all the states were convinced that this notion was obsolete and changed their laws . for the most part investors can still request their certificates but this has several inconveniences and most people do not except for novelty value . this led the new york stock exchange to establish the central certificate service ccs in 1968 10 at 44 broad street in new york city . 8 anthony p. reres was appointed the head of ccs . nyse president robert w. haack promised we are going to automate the stock certificate out of business by substituting a punch card . we just can t keep up with the flood of business unless we do . 11 the ccs transferred securities electronically eliminating their physical handling for settlement purposes and kept track of the total number of shares held by nyse members . 12 this relieved brokerage firms of the work of inspecting counting and storing certificates . haack labeled it top priority 5 million was spent on it 13 and its goal was to eliminate up to 75 % of the physical handling of stock certificates traded between brokers . 11 one problem however was that it was voluntary and brokers responsible for two thirds of all trades refused to use it . 7 by january 1969 it was transferring 10 000 shares per day and plans were for it to be handling broker to broker transactions in 1 300 issues by march 1969 . 14 in 1970 the ccs service was extended to the american stock exchange . 15 this led to the development of the banking and securities industry committee basic which represented leading u.s. banks and securities exchanges 9 and was headed by a banker named herman beavis and finally the development of dtc in 1973 16 which was headed by bill dentzer the former new york state banking superintendent . 17 all the top new york banks were represented on the board usually by their chairman . basic and the sec saw this indirect holding system as a temporary measure on the way to a certificateless society . 9 the second method involves multilateral netting ; and led to the formation of the national securities clearing corporation nscc in 1976 . in 2010 robert druskin was named executive chairman of the company and in july 2012 michael bodson was named president and chief executive officer . in 2008 the clearing corporation and the depository trust & clearing corporation announced ccorp members will benefit from ccorp s netting and risk management processes and will leverage the asset servicing capabilities of dtcc s trade information warehouse for credit default swaps cds . 18 19 20 21 on 1 july 2010 it was announced that dtcc had acquired all of the shares of avox limited based in wrexham north wales . deutsche b rse had previously held over 76 % of the shares . dtcc entered into a joint venture with the new york stock exchange nyse known as new york portfolio clearing that would allow investors to combine cash and derivative positions in one clearinghouse to lower margin costs . 22 legislation edit the dtcc supported the customer protection and end user relief act h.r. 4413 ; 113th congress arguing that it would help ensure that regulators and the public continue to have access to a consolidated and accurate view of the global marketplace including concentrations of risk and market exposure . 23 controversy over naked short selling edit several companies have sued the dtcc without success over delivery failures in their stocks alleging culpability for naked short selling . furthermore the question of whether dtcc is culpable for naked short selling has been raised by senator robert bennett and the nasaa and discussed in articles in the wall street journal and euromoney . 24 25 dtcc contends that the suits are orchestrated by a small group of lawyers and executives to make money and draw attention from the companies problems . 25 critics blame dtcc noting that it is the organization in charge of the system where it happens alleging that dtcc turns a blind eye to the problem and complaining that the securities and exchange commission sec has not taken sufficient action against naked shorting . 25 dtcc has responded that it has no authority over trading activities can not force buy ins of shares not delivered 26 and suggests that naked shorting is simply not widespread enough to be a major concern . we re not saying there is no problem but to suggest the sky is falling might be a bit overdone said dtcc s chief spokesman . the sec however viewed naked shorting as a sufficiently serious matter to have made two separate efforts to restrict the practice . 25 dtcc has said that the sec has supported its position in legal proceedings . 26 27 28 dtcc general counsel larry thompson calls the claims that dtcc is responsible for naked short selling pure invention . 28 in july 2007 senator bob bennett republican of utah suggested on the u.s. senate floor that the allegations involving dtcc and naked short selling are serious enough to warrant a hearing . the committee s chairman senator christopher dodd indicated he was willing to hold such a hearing . 29 to date no such hearing was ever held and no further action on naked short selling is anticipated . representing state stock regulators the north american securities administrators association nasaa filed a brief in a 2009 suit against dtcc arguing against federal preemption as a defense to the suit . nasaa said that if the investors claims are taken as true as they must be on a motion to dismiss then the entrepreneurs and investors before the court have been the victims of fraud and manipulation at the hands of the very entities that should be serving their interests by maintaining a fair and efficient national market . 30 this suit was later dismissed by the courts . critics also contend that dtcc and the sec have been too secretive with information about where naked shorting is taking place . 25 dtcc says it has supported releasing more information to the public . 26 in recent years this controversy has died down as the impact of changes to sec rule 203 under regulation sho adopted in 2008 dramatically curtailed long term short positions and complaints about naked short positions declined . subsidiaries edit dtcc has several subsidiaries the depository trust company dtc the original securities depository . 31 32 established in 1973 it was created to reduce costs and provide efficiencies by immobilizing securities and making book entry changes to show ownership of the securities . dtc moves securities for nscc s 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 2007 dtc settled transactions worth 513 trillion and processed 325 million book entry deliveries . in addition to settlement services dtc retains custody of 3.5 million securities issues worth about 40 trillion including securities issued in the united states and more than 110 other countries . dtc is a member of the u.s. federal reserve system and a registered clearing agency with the securities and exchange commission . most large u.s. broker dealers and banks are full dtc participants meaning that they deposit and hold securities at dtc . dtc appears in an issuer s stock records as the sole registered owner of securities deposited at dtc . dtc holds the deposited securities in fungible bulk meaning that there are no specifically identifiable shares directly owned by dtc participants . rather each participant owns a pro rata interest in the aggregate number of shares of a particular issuer held at dtc . correspondingly each customer of a dtc participant such as an individual investor owns a pro rata interest in the shares