When DTCC undertook a pivotal multi-year consolidation to streamline its equity trade capture systems, the result was the ground breaking Universal Trade Capture (UTC) system. As a result of this new benchmark in trade-capture and reporting processes, the foundation was also laid for a breakthrough in risk management in the post-trade environment: DTCC Limit Monitoring.
About DTCC Limit Monitoring provides an overview of the DTCC Limit Monitoring tool and its development. The Limit Monitoring Tool Webcast explains how to access the application and use important features. Access the Limit Monitoring Documentation and online help to learn about the DTCC Limit Monitoring features, including information about risk entities, trade arrays, alerts, and more.
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The DTCC Limit Monitoring tool is a web-based, near real-time, post-trade equity risk monitoring tool that provides member firms with an updated snapshot of their own business units' and of their correspondents' and clients’ trading activities. Leveraging NSCC's role as the central counterparty for the U.S. equities market, Limit Monitoring provides member firms with near real-time trade information in a centralized and standard method.
The advantages of Limit Monitoring all begin with its quality pool of data. The tool offers access to the largest aggregate trading information in the U.S. equity marketplace. DTCC's clearing data combines virtually all broker-to-broker equity, listed corporate and municipal bond, and UIT trading in the U.S., originating from all exchanges, electronic trading systems and liquidity destinations. Additionally, Limit Monitoring eliminates the noise from millions of cancelled orders in today's markets by only reporting executed trades.
The tool allows NSCC member firms to:
- Organize their firm’s unsettled trades into units for tracking exposure known as "risk entities."
- Define the net-notional risk limit for each risk entity.
- Modify risk limits.
- Submit start-of-day exposure information.
Limit Monitoring also:
- Allows you to drill down from the risk entity exposure level to the CUSIP and to the individual trade level.
- Provides on-screen and electronic alerts, systemic and email, early warnings as exposures approach limits.
Given the importance of providing NSCC members with the ability to conduct post-trade surveillance and the critical role exposure monitoring plays in preventing risks associated with trading technology errors, the Limit Monitoring tool is available to all NSCC members. However, NSCC requires that the following members register and utilize the Limit Monitoring tool:
- Any NSCC full service member that clears for others.
- Any NSCC full service member that submits transactions to NSCC’s trade capture system on behalf of a correspondent either as a Qualified Special Representative (QSR) or Special Representative (SR).
- Any NSCC full service member that has established a 9A/9B relationship in order to allow another NSCC member, either QSR or SR, to submit locked in trade data on its behalf.
Watch this short video for an overview of DTCC's Limit Monitoring.
All information regarding DTCC Limit Monitoring provided herein is subject to, and superseded by, the description of DTCC Limit Monitoring that is set forth in NSCC’s Rules. NSCC’s Rules would, at all times, govern the operation of DTCC Limit Monitoring.