Depository Trust Company (DTC)

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Definition of 'Depository Trust Company (DTC)'

The Depository Trust Company (DTC) is a private corporation that provides clearing, settlement, and asset custody services for the U.S. securities industry. DTC is the largest securities depository in the world, holding more than $40 trillion in securities.

DTC was founded in 1973 as a joint venture of the New York Stock Exchange and the National Association of Securities Dealers. The company's mission is to facilitate the safe and efficient flow of securities transactions by providing a central depository for securities and a clearing system for securities trades.

DTC offers a variety of services to its customers, including:

* Securities clearing and settlement: DTC settles securities trades on a net basis, which means that each day, the company calculates the net amount of securities that each participant owes to or is owed by another participant. DTC then transfers the securities between participants' accounts, and each participant pays or receives the net amount due.
* Asset custody: DTC holds securities in custody for its customers. This means that DTC takes physical possession of the securities and is responsible for their safekeeping.
* Securities lending: DTC facilitates the lending of securities between its customers. This allows customers who need to borrow securities to do so without having to find a counterparty on their own.

DTC is a critical part of the U.S. securities market. The company's services help to ensure the safe and efficient flow of securities transactions, and its asset custody services help to protect investors' securities.

DTC is governed by a board of directors, which is composed of representatives from the securities industry. The company is also subject to regulation by the Securities and Exchange Commission (SEC).

DTC is a privately held company, and its financial results are not publicly disclosed. However, the company has reported that it has processed more than $100 trillion in securities transactions since its inception.

DTC is a major player in the U.S. securities market, and its services are essential to the safe and efficient flow of securities transactions. The company's role in the market is likely to continue to grow in the years to come, as the volume of securities transactions continues to increase.

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