Smith On Stocks, 11 April 2019
I am not going to attempt to show in any detail how the clearing, settlement and depositing of securities system evolved from the crisis of the mid-60s to what is now a totally paperless, electronic system. But briefly, Congress passed legislation in 1971 for two new service organizations, whose objectives were the speeding up the clearance and settlement process. The Depository Trust Company (DTC) was established as the nation’s principal securities depository, with the mission to convert paper certificates to electronic book entries and to immobilize the paper certificates and keep them in a vault at the DTC. (No more shuttling by messengers.) The National Securities Clearing Corporation (NSCC) was established at the same time to speed up clearance and settlement services.