The Depository Trust & Clearing Corporation (DTCC) today announced that as anticipated, the Financial Stability Oversight Council (FSOC) has designated National Securities Clearing Corporation (NSCC), The Depository Trust Company (DTC) and Fixed Income Clearing Corporation (FICC) as Systemically Important Financial Market Utilities (SIFMUs). All three organizations are U.S. clearing and depository subsidiaries of DTCC. As the primary infrastructure for the U.S. capital markets, DTCC ensures the guaranteed, safe transfer between buyers and sellers of virtually all securities transactions in the U.S.
In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA), FSOC’s designation of a systemically important financial market utility requires these institutions meet prescribed risk management standards and heightened oversight by the relevant US regulatory authorities. The DFA and FSOC provisions related to systemically important institutions are designed to promote robust risk management and safety and soundness, reduce systemic risk, and support the stability of the broader financial system.
“While we will continue to closely assess the implications of this designation, DTCC remains committed to consistently operating to the highest of risk management standards. We do not anticipate these designations will either significantly change our day-to-day business or how we work with our clients,” said Michael Bodson, DTCC’s President and Chief Executive Officer.
DTCC provides central counterparty (CCP) clearing and settlement services for virtually all broker-to-broker equity, listed corporate and municipal bond, and unit investment trust transactions in the U.S. through its National Securities Clearing Corporation and for all U.S. treasury, government, and mortgage back securities through its Fixed Income Clearing Corporation. Its Depository Trust Company provides custody and asset servicing for securities issues from 122 countries and territories valued at US$39.5 trillion.
“DTCC’s continuing focus and commitment is to bring greater risk mitigation, operational efficiency and transparency into the trading of securities, while also fostering growth in the capital markets,” said Bodson. “These designations were expected and underscore the critical role we play in protecting the safety, soundness and integrity of the financial system.”
