DTCC Plans Study on Faster Settlement for U.S. Securities

The Depository Trust & Clearing Corp. is commissioning a study on whether the U.S. securities industry should cut the time it takes to process transactions, a shift that may reduce risk and compel brokers and asset managers to spend more on further updating their systems.

The New York-based company that handles and guarantees trades in U.S. stocks, corporate bonds and municipal securities hired the Boston Consulting Group Inc. to assess the costs and benefits of settling trades in fewer than three days, the current standard, Elena Staloff, a vice president at DTCC, said in a phone interview. A shorter cycle would mean firms could post less capital to the clearing fund run by DTCC subsidiary National Securities Clearing Corp. to cover a defaulting broker’s obligations and pay less to meet the organization’s liquidity needs to handle a problem, she said.