The Depository Trust Company (DTC) is one of the world's largest securities depositories. Founded in 1973 and based in New York City, the DTC is organized as a limited purpose trust company and provides safekeeping through electronic record-keeping of securities balances. It also acts as a clearinghouse to process and settle trades in corporate and municipal securities. The DTC has over 2,000 customers, including broker-dealers, banks, trusts, investment companies and other institutions around the world.The benefits of using the DTC are many fold:The first reason to use the DTC is its safety and security. Because it maintains an electronic record of all security holdings , there is no need for clients to worry about losing track of their investments or having them stolen. In addition, because it serves as a clearinghouse for all transactions processed within its system, clients can be assured that their orders will be filled quickly without any delay or confusion.Another key benefit of using the DTC is its efficiency. With such a large customer base, it enjoys economies of scale that allow it to offer low costs for custody services while still maintaining high standards for security. Furthermore, because all transactions are processed through one central location, investors can save time by not having to contact multiple intermediaries when buying or selling securities.
