DTC, NSCC REPORT COST SAVINGS AND EFFICIENCIES FROM ID NET
BROKER-SIDE NETTING SERVICE
Posted August 11, 2008
“Over the past couple years, we’ve seen marked growth in institutional
trades, which has meant an increased number of steps, risks and costs in
the overall clearance and settlement process,” says Susan Cosgrove, DTCC
Managing Director, Clearance and Settlement Group. “This service will
benefit all parties involved in institutional trading by increasing the
overall certainty of settlement for matched institutional trades,
encouraging early affirmation and reducing risks. In addition, banks and
broker-dealers will realize cost savings, with the DTC Institutional
Delivery (ID) fee reduced in half for all eligible trades for those who
participate.”
The US Securities and Exchange Commission recently approved rule changes
requested by DTC and NSCC that made the launch of ID Net possible. The
first trades eligible to settle on ID Net were those with the settlement
date of June 16. To participate on ID Net, broker-dealers must be
participants of both NSCC and DTC, and banks must be DTC participants.
The Depository Trust & Clearing Corporation worked with its Omgeo LLC
joint venture to develop ID Net for the DTC and NSCC.
“Omgeo TradeSuite’s enhanced interface with DTCC’s Settlement Services will further benefit our mutual clients to allow for the efficiencies offered by DTCC’s ID Net implementation,” says Steve Matthews, Managing Director, Product, Omgeo. “This collaborative effort will streamline the way eligible affirmed institutional equity trades are cleared and settled at DTCC by providing industry participants with the benefit of netting transactions.”