Depository Trust Company - DTC

Definition of 'Depository Trust Company - DTC'


One of the world's largest securities depositories. The Depository Trust Company, founded in 1973 and based in New York City, is organized as a limited purpose trust company and provides safekeeping through electronic recordkeeping of securities balances. It also acts like a clearinghouse to process and settle trades in corporate and municipal securities.

Investopedia explains 'Depository Trust Company - DTC'


The DTC emerged in the late 1960s when the New York Stock Exchange became unable to handle its trade volume, which was then in excess of 8 million shares per day. Thanks in part to the DTC, the NYSE now can handle billions of trades per day. As an automated system, the DTC lowers costs and improves accuracy. The Depository Trust Company is owned by the Depository Trust and Clearing Company, which manages risk in the financial system. Formerly an independent entity, the DTC was consolidated with several other securities clearing companies in 1999 and became a subsidiary of the DTCC.

The DTC holds trillions of dollars’ worth of securities in custody, including corporate stocks and bonds, municipal bonds and money market instruments. It settles funds at the end of each trading day using the Fedwire Funds Service. The DTC is registered with the SEC, is a member of the Federal Reserve System, and is owned by many companies in the financial industry, with the NYSE being one of its largest shareholders. Securities brokers, dealers, institutional investors, depository institutions, issuing and paying agents and settling banks use the DTC, but individual investors do not interact with it.

In addition to safekeeping, recordkeeping and clearing services, the DTC provides direct registration, underwriting, reorganization, and proxy and dividend services. For example, under its dividend services, it announces when a company declares a dividend, then collects the dividend payment from the issuing company, allocates dividend payments to shareholders and reports those payments.



comments powered by Disqus
Hot Definitions
  1. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
  2. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
  3. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
  4. Jeff Bezos

    Self-made billionaire Jeff Bezos is famous for founding online retail giant Amazon.com.
  5. Re-fracking

    Re-fracking is the practice of returning to older wells that had been fracked in the recent past to capitalize on newer, more effective extraction technology. Re-fracking can be effective on especially tight oil deposits – where the shale products low yields – to extend their productivity.
  6. TIMP (acronym)

    'TIMP' is an acronym that stands for 'Turkey, Indonesia, Mexico and Philippines.' Similar to BRIC (Brazil, Russia, India and China), the acronym was coined by and investor/economist to group fast-growing emerging market economies in similar states of economic development.
Trading Center