National Securities Clearing Corporation - NSCC


DEFINITION of 'National Securities Clearing Corporation - NSCC'

A subsidiary of the Depository Trust & Clearing Corporation (DTCC) that provides centralized clearing, risk management, information and settlement services to the financial industry. The NSCC offers multilateral netting so that brokers can offset buy and sell positions into a single payment obligation, thereby reducing financial exposure and capital requirements.

BREAKING DOWN 'National Securities Clearing Corporation - NSCC'

The National Securities Clearing Corporation was established in 1976 and is a registered clearing corporation regulated by the U.S. Securities and Exchange Commission (SEC). Before its inception, huge demand of paper stock certificates were a reality for stock brokerages, causing the stock exchanges to close once a week. To overcome this problem, multilateral netting was proposed, leading to the formation of the NSCC. The corporation serves as a seller for every buyer, and buyer for every seller for trades settled in U.S. markets.

The NSCC and DTC (another subsidiary of the DTCC) play a major part in the settlement and clearing of securities transactions. They are the largest providers of these services, worldwide.

  1. Depository Trust Company - DTC

    One of the world's largest securities depositories, it holds ...
  2. Clearing House

    An agency or separate corporation of a futures exchange responsible ...
  3. Depository Trust & Clearing Corporation ...

    Established in 1999, the DTCC is a holding company consisting ...
  4. Options Clearing Corporation - ...

    An organization that acts as both the issuer and guarantor for ...
  5. Threshold List

    A daily public accounting of market settlement system failures ...
  6. Clearing

    The procedure by which an organization acts as an intermediary ...
Related Articles
  1. Investing Basics

    Principal Trading and Agency Trading

    Ever wonder what happens behind the scenes when you buy or sell a stock? Read on and find out!
  2. Fundamental Analysis

    Derivatives 101

    Learn how to use this type of investment as an alternative way to participate in the market.
  3. Options & Futures

    An Introduction To Managed Futures

    Their inverse correlation with stocks and bonds make these alternative investments worth getting to know.
  4. Economics

    What Do Central Counterparty Clearing Houses Do?

    A central counterparty clearing house facilitates trading in European derivatives and equities markets.
  5. Investing Basics

    What Does a Clearing House Do?

    A clearing house is a third-party agency or separate entity that acts as a go-between for buyers and sellers in financial markets.
  1. What is the haircut rate imposed by clearing corporations?

    A haircut rate is a measure that reduces the value of any collateral used in a loan to ensure that when the effects of volatility ... Read Full Answer >>
  2. When is a share purchase marked as 'settled' by a brokerage?

    The T+3 rule governs the settlement of stock share purchases. Per the rule, set by the Uniform Practice Code, purchases of ... Read Full Answer >>
  3. How are swap agreements financed?

    Since swap agreements involve the exchange of future cash flows and are initially set at zero, there is no real financing ... Read Full Answer >>
  4. What are the Securities and Exchange Commission regulations regarding swaps?

    The U.S. Securities and Exchange Commission (SEC) was granted the authority to regulate security-based swaps (SBS) by Title ... Read Full Answer >>
  5. How does the Private Sector Adjustment Factor (PSAF) affect competition in the private-sector?

    There's no sure way of evaluating the real impact of the private sector adjustment factor (PSAF) on the competitiveness of ... Read Full Answer >>
  6. What does CHIPS UID mean?

    CHIPS UID stands for Clearing House Interbank Payments System Universal Identifier. This is just a fancy name for an electronic ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  2. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  3. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  4. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
  5. Normal Profit

    An economic condition occurring when the difference between a firm’s total revenue and total cost is equal to zero.
  6. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!