Match each capital market clearing or settlement entity to its primary operational function within U.S. financial markets.
- Depository Trust Company (DTC)Maintains central custody of securities certificates and facilitates computerized book-entry movement of stock and bond ownership.
- National Securities Clearing Corporation (NSCC)Acts as the central counterparty to clear and net secondary market equity transactions between clearing member broker-dealers.
- Options Clearing Corporation (OCC)Serves as the sole issuer and guarantor for all exchange-traded options contracts across U.S. options exchanges.
- Fixed Income Clearing Corporation (FICC)Provides central counterparty clearing, netting, and settlement services specifically for U.S. Treasury securities and mortgage-backed debt.
Answer
Depository Trust Company (DTC) pairs with maintaining central custody and facilitating electronic book-entry ownership movements. National Securities Clearing Corporation (NSCC) pairs with providing central counterparty clearing and netting for secondary equity transactions. Options Clearing Corporation (OCC) pairs with serving as the issuer and guarantor for exchange-traded options contracts. Fixed Income Clearing Corporation (FICC) pairs with providing clearing, netting, and settlement services for U.S. Treasury and mortgage-backed securities.
DTC functions as the central securities depository maintaining custody and performing book-entry ownership updates. NSCC performs trade comparison, continuous net settlement, and novation for equity securities. OCC acts as the central issuer and guarantor for exchange-traded options contracts. FICC provides clearing, risk management, and multilateral netting for government debt securities and mortgage-backed obligations.
Step-by-Step Solution
Key Concept
Institutional roles of post-trade depositories and clearing corporations (DTC, NSCC, OCC, FICC)