What is a depository trust company?
The depository company is a company established in New York in 1973. The purpose of this company is to centralize the holding of paper certificates. For more than three decades, DTC has helped much more efficient trading and other activities on Wall Street.
Before the establishment of DEPOSITORY TRUST Company, brokers have always exchanged paper certificates for stocks. With the rise of new technologies and the more diverse trade patterns, the market quickly amazed with the amount of hands changing paper. DTC provided better records and central placement for shares certificates and alleviated many problems concerning the monitoring of mountains financial papers.
In 1968, several years before the depository, officials in New York Stock Exchange have already begun planning to rework the paper system, resulting in massive confusion and a lot of lost certificates. CCS, or central certification service, played a similar role in New York and played a similar role until the foundation of DTC, when the services were maintainedLiving stocks extended to the entire US stock market. Another correctional service called National Crearities Clearing Corporation (NSCC) also provides different types of security in transactions of intermediaries focusing on clearing, settling and risk management.
When DTC started using electronic records to track stock, computers were still a much smaller part of the store than they are today. A few years later, the Internet would replace simple database and archiving suggestions with incredible financial software services, including full -fledged brokerage accounts where traders could buy or sell at will and even predictive business software. The evolution of the Trust Company depository represents the one of the first steps in the progressively more digital and virtual financial world.
DTC today works through a holding company, a deposit Trust and Clearing Corporation. With the 55 Water Street offices in New York, DTCC is presenting both for the Trust Company for the Trust Company and the Clearing Corporation National Securities Clearing Corporation. Although DTC and DTCC were included in interviews on the practice of "naked short sales", where traders can conclude agreements without necessary support, the same services that revolutionized the world on the stock market in 1973, increasingly provide more accurate records of possession for stock market transactions.