DTCC files SEC application for securities finance clearing house 

The application is the formal start of the launch process of a central clearing and settlement service for overnight equity securities financing. 

By Joe Parsons

DTCC has filed its application with the US Securities and Exchange Commission (SEC) to launch its upcoming securities finance clearing service.  

The National Securities Clearing Corporation (NSCC) – the DTCC’s fixed income clearing house – is planning to launch the new Securities Financing Transactions (SFT) clearing service in the third quarter of this year.  

The application with the SEC is the formal start of the launch process where it proposes to provide central clearing and settlement services overnight equity securities financing. 

It also proposes the establishment of new membership categories, including direct access for banks and brokers, and a sponsored model to buy-side firms. 

DTCC has stated the new clearing offering will bring numerous benefits to clients by significantly enhancing market access, reducing risk and costs, and offering new efficiency opportunities for participating members.  

Earlier this year, DTCC partnered with Broadridge to act as an Approved SFT Submitter, in which members will submit transaction through the firm, while also authorising it to submit locked-in trade transaction data on their behalf. 

The US market infrastructure group currently offers a sponsored repo clearing service, via its Fixed Income Clearing Corporation (FICC) subsidiary, which has been utilised by money market funds and hedge funds. 

The Options Clearing Corporation (OCC) also provides a securities lending clearing service – and in May last year, it announced it would be replacing the infrastructure used for the service with distributed ledger technology (DLT).