Settlement Process

After transactions are input for Settlement, DTC’s look ahead processing system calculates the net effect to the collateral and net debit cap controls for the parties involved and if the net effect will not result in a deficit in the collateral or net debit cap for any of the parties, it processes the transactions to a status of “Made.” These “Made” transactions are ready for final settlement.

This same process also allows Money Market Issuance deliveries pending for a Custodian’s or Dealer’s net debit cap to complete against maturity presentments pending for an Issuing/Paying Agent’s net debit cap. The processing system calculates the net effect of the dollar amount of offsetting transactions in the accounts of the two clients involved. If the net of the transactions results in positive risk management controls in those two accounts, the transactions will be completed.

In 2019, the Night Batch process was reengineered with a new processing algorithm. This “off-line” batch is not visible to clients allowing DTC to run multiple processing scenarios until the optimal processing scenario is identified.