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THE STORY OF THE DEPOSITORY TRUST & CLEARING CORPORATION
interfaces were compatible. “We had to interface with the other depositories because they would make deliveries from their participants to ours and vice versa,” Dentzer said. “The interface was important. On the other hand, we were always concerned about their financial stability.” The concern was what would occur if DTC made a delivery for one of its participants to one of the regional depository participants who did not want to pay for it. Would the regional depository be able to come up with the funds to cover the amount? This was a risk that weighed heavily on the firm. Despite the risks and challenges the firm faced, DTC continued to grow, and in 1973, it took further steps to separate itself from NYSE by moving its offices to 55 Water Street in downtown Manhattan.
Technology and Innovation at the Forefront
From its inception, DTC relied on technology to drive innovation. While the firm drew its initial 800-person staff primarily from CCS, newcomers brought fresh ideas. Thomas Lee was hired to develop a new information technology system, moving DTC away from NYSE’s systems. The Institutional Delivery System (ID) began to operate, processing electronic confirmations for institutional trades, and eventually the stock exchanges required all members to confirm all institutional trades. DTC was charged with training the industry in the new procedures. ID quickly drew a competitor in expanding to processes between broker-dealers and investment managers. Safety and security of technology were always at the forefront. Even in those earliest days, a backup system was in place. “We had the most sophisticated
DTC’s commitment to investing in state-of-the-art technology and security began at the earliest stages of the company as it faced scrutiny from government regulators.
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