Market Best Practices for The United States: Depository Trust Company (DTC)

This topic provides best practices for populating and interpreting settlement instructions for the United States: Depository Trust Company (DTC) when using The Depository Trust Company (DTC).

Notes

DTCC recommends the following:

  • Maintain generic information at the model level; meaning data that is applicable to multiple accounts and attached to a model.
  • Populate items specific to an account at the account level.

Broker/Dealers

Use the Market Best Practices for Broker/Dealers to view the latest applicable country/security/method (CSM) combinations and best practices.

Investment Managers

Use the Market Best Practices for Investment Managers to view the latest applicable country/security/method (CSM) combinations and best practices. This section will be removed after May 24th.

To create an SSI on ALERT for this market, use the following recommended ALERT® country/method/security combination:

  • Country: UNITED STATES - US
  • Method: DTC - Depository Trust Company
  • Security (one of the following):
    • EQU - Equities
    • MMT - Money Market
    • COB - Corporate Bonds (for any corporate fixed income)
    • TRY - Treasuries (for any government fixed income)
    • MSC - Miscellaneous
Note
For GC Direct Account maintenance, DTCC recommends maintaining a minimum of three basic security types for each market: Equity (EQU); Fixed Income (COB); and Government Bonds (TRY). To enable faster onboarding, you can align with your custodian on security types in preparation for GC Direct onboarding. Check with you custodian if other security types, such as Money Market (MMT), are supported.

The essential market elements for DTC standing settlement instructions are:

  • DTC Place of Settlement (PSET) BIC: DTCYUS33.

    ALERT automatically populates this field when you select DTC as the method of settlement

  • DTC number (DTC#) of the executing broker, which is entered in the Inst/Broker ID field (generic field name: ID3).

    The ID number must exist in the DTC ID Master file and be exactly eight characters. If the number is less than eight characters, ALERT pads it with leading zeros.

  • DTC number (DTC#) of the local agent, which is entered in the Agent ID field (generic field name: ID2).

    The ID number must exist in the DTC ID Master file and be exactly eight characters. If the number is fewer than eight characters, ALERT pads it with leading zeros.

  • DTC Participant ID that identifies the local clearing agent at the DTC. Enter it in the DTC# field (generic field name: A/C# @ Depository).

    The ID number must exist in the DTC ID Master file and be exactly eight characters. If the number is less than eight characters, ALERT pads it with leading zeros.

  • Identify the local agent by its BIC, which is entered in the Local Agent BIC field.

  • Executing Broker BIC. Enter it in the Institution/Broker BIC field.

    Note
    In investment manager instructions, interpret the A/C# @ Global Custodian field as the security account number of the investment manager’s fund at the global custodian; that is, the safekeeping account. It is not an account number internal to the DTC.

When the global custodian is based in the United States, clearing at the DTC is carried out directly, without a local agent or an intermediary. The custodian would therefore have direct membership at the DTC. As it is a scenario of one level of clearing, enter the custodian’s data in the Settlement Party Data: Local Clearing Agent Data group.

The next table lists the fields for settling in the US using DTC with One Level of Clearing.

Table 2  Investment Manager DTC Settlement Fields for One Level of Clearing
Field Name Definition Example Mapped to SWIFT Tag
Depository/Clearing/Settlement Agency Data
PSET BIC Place of Settlement DTCYUS33 Yes
Inst/Broker ID DTC number of investment manager 00052564 Yes
Agent ID (ID2) Optional. DTC number of local agent 000 00026022 Yes
DTC# DTC Participant ID of local clearing agent 00000997 Yes
Internal DTC A/C# Fund or safekeeping account at the global custodian 0109  
Participant Name associated with the DTC ID (local agent) State Street Boston No
Settlement Party Data: Local Clearing Agent Data
A/C Ref Fund or safekeeping account name Client Relations Pension Fund No
Local Agent BIC BIC identifying the local agent. On one level of clearing, this field is populated with the global custodian BIC. SBOSUS3FCLS Yes

The next figure is an example of how to populate investment manager settlement instructions for one level of clearing.

Figure 4 Investment Manager DTC Settlement Instructions, 1 Level

The next table lists the fields for settling in the US using DTC with Two Levels of Clearingl

Table 3  Investment Manager DTC Instructions for Two Levels of Clearing
Field Name Definition Value
Depository/Clearing/Settlement Agency Data
PSET BIC Place of Settlement DTCYUS33
Inst/Broker ID DTC number of investment manager 00048599
Agent ID DTC number of local agent 00048599
DTC # DTC Participant ID of local clearing agent 00002266
Participant Name associated with the DTC ID of local agent Citibank New York
Settlement Party Data: Local Clearing Agent Data
A/C# @ Local Agent On two levels of clearing, the account of the global custodian at the local agent. 967-01
A/C Ref Fund or safekeeping account name Global Development Fund
Local A/C Ref Name of the account at the local agent CITIBANK LONDON
Local Agent BIC BIC identifying the local agent. On two levels of clearing, populate this field with the local agent BIC. CITIUS33ADR
Settlement Party Data: Custodian Data  
A/C# @ Global Custodian Fund or safekeeping account at the global custodian. 002266
Custodian BIC On two levels of clearing, BIC identifying the global custodian. For one level of clearing, this field is left blank. CITIGB2LXXX

Example: Cross-Border, Two Levels of Clearing for DTC

The next figure is an example of how to populate the settlement instruction fields for DTC. It includes essential market elements and other recommended fields.

Figure 5 Investment Manager DTC Settlement Instructions, 2 Levels