Depository Trust Company - DTC

Once upon a time in the not too distant past (TV existed then, albeit in black & white), settlements for stock and bond trades were physically matched by hand. This was back when stock trading was an exotic and rare occurrence, when runners still physically gave tickets to specialists from the floor traders on the exchange. As volumes and human error began to creep in more, the process started to become unwieldy.

Established in 1973 to be a depository to facilitate trade settlement in an efficient and precise manner, the Depository Trust Company (DTC) has become indispensable for the exponential volume increase of stock trading that has arisen in the digital age.

By acting as a neutral, third party securities depository, DTC electronically matches ever trade conducted through U.S. exchanges, (including foreign securities), and coordinates with other international exchanges’ clearing houses, such as Euroclear, for foreign securities traded through U.S. accounts. DTC also serves as a safekeeping entity, as well as a record-keeping reporting service to the IRS and a dividend collection and routing service.