In post-trade operations across U.S. financial markets, specialized clearing entities and depositories perform distinct operational functions. Match each market entity on the left with its principal operational role on the right.
- Depository Trust Company (DTC)Serves as the primary central securities depository holding immobilized certificates and processing electronic book-entry ownership changes.
- National Securities Clearing Corporation (NSCC)Acts as central counterparty offering clearance, trade comparison, and continuous net settlement (CNS) for equity securities.
- Options Clearing Corporation (OCC)Functions as the sole issuer and central guarantor for exchange-listed options and futures contracts.
- Fixed Income Clearing Corporation (FICC)Operates as central counterparty for clearance, netting, and settlement of U.S. government bonds and mortgage-backed securities.
Answer
Depository Trust Company (DTC) matches with the central securities depository handling immobilized certificates and book-entry transfers. National Securities Clearing Corporation (NSCC) matches with the central counterparty providing clearance and netting for equity securities. Options Clearing Corporation (OCC) matches with the issuer and guarantor of exchange-listed options. Fixed Income Clearing Corporation (FICC) matches with the clearing entity for U.S. government debt and mortgage-backed securities.
Each entity performs a distinct capital market infrastructure role: DTC operates as the central securities depository maintaining custody and executing electronic book-entry ownership changes; NSCC acts as the central counterparty for equity and corporate debt trades through continuous netting; OCC serves as the issuer and guarantor of exchange-traded options contracts; FICC handles clearance and netting specifically for government securities and mortgage-backed debt.
Step-by-Step Solution
Key Concept
Operational roles of market depositories, clearing corporations, and central counterparties in U.S. capital markets.